Annual
Report
2013
Contents // Main developments 2013 | Annual Report 2013
Contents
2
3
5
6
12
13
14
15
Main Developments 2013
Key Figures
Letter from the CEO
The Board of Directors’ Report
The Board of Directors
WB Shipholding – Fleet and
deliveries
Financials
Western Bulk Group – Consolidated
Consolidated Income Statement
Consolidated Statement of
Comprehensive Income
16
18
Consolidated Balance Sheet
Consolidated Statement of Changes
in Equity
19
20
Consolidated Statement of Cash Flow
Notes to the accounts
44
45
46
47
Western Bulk ASA – Parent Company
Profit and Loss Statement
Balance Sheet
Cash Flow Statement
Notes to the accounts
51
58
62
Corporate Governance and CSR
Corporate Governance Report
Corporate Social Responsibility
(“CSR”) Statement
Auditor’s Report
Western Bulk Main Developments 2013
■ Financial Highlights
The Group increased its gross revenues by 4.5% from 2012 to 2013 and the operated fleet
continued to grow in a market with challenging conditions to operate in. The low market rates
with exceptionally low volatility in rates, put the margins under pressure and reduced the Net
TC result to USD 54.7 million in 2013, compared to USD 71.2 million in 2012. The EBITDA
decreased from USD 30.3 million in 2012 to USD 17.9 million.
Following a NOK 300 million unsecured bond issue in April and a share capital issue and sale
of non-core financial assets in connection with the IPO and listing of the Company’s shares on
the Oslo Stock Exchange in October, the financial position of the Group is very healthy and
supports a further growth strategy for the future.
■ Dry Bulk Shipping Market
The market trend from 2012 continued into 2013, and turned the first three quarters into the
most challenging markets for many years for Western Bulk’s business. Again, the increase in
the world fleet outpaced the increased demand for freight, depressing the already low rates.
The Supramax Index started at USD 7,654 and hovered around USD 7,000 to USD 10,000 in the
first three quarters, with record low volatility, before we saw a climb in rates from the second
half of September until the last part of December. By the end of the year, the Supramax index
was USD 15,195. The average rate level for 2013 was around USD 10,300 compared to an
average of about USD 9,500 in 2012.
■ Share Price Performance
The share price saw an increase from NOK 12.00 to NOK 16.00 (33% increase) from the time of
the listing in October until the last trading day in December 2013.
■ Western Bulk Chartering AS
Western Bulk Chartering operates a modern fleet of Handysize, Supramax/Ultramax and
Panamax vessels, of which the Supramax/Ultramax size accounts for about 65% of the fleet.
The division continued to grow in 2013 by adding more vessels to its fleet, and positioning
itself with attractive charter-in contracts with significant optionality to extend the charters at
fixed rates.
• The division’s operated fleet size has increased from an average of 129 vessels in 2012 to
153 vessels in 2013, equal to more than 18% growth.
• The activity reached a new all-time high in November 2013 with 191 vessels.
• The number of option days available for future periods for the chartered-in fleet increased to
34,000 days at the end of 2013.
• Net TC margin per ship day declined from USD 1,426 in 2012 to USD 979 in 2013. The
64
Addresses
decline was partly due to very challenging market conditions for the first three quarters of
2013, but also due to geographical positioning that turned unfavorable when the market
rates increased unevenly in different regions of the world in the fourth quarter.
■ Western Bulk Shipholding AS
Western Bulk Shipholding continued to build a core fleet of modern Eco design vessels by
adding to its fleet 11 long term chartered-in Ultramax and Supramax vessels with purchase
options at attractive rate levels. All are newbuildings to be delivered in 2014-2017. The division
had an average of 9 vessels on the water in 2013 that were chartered out to Western Bulk
Chartering as well as third parties.
In 2013 Western Bulk
carried 37.9 million
tonnes of cargo. This
was an increase of 7%
from 2012.
As of 31.12.2013 WB Shipholding’s fleet counted:
• One bareboat-chartered vessel
• Four partly owned vessels
• 22 time-chartered vessels of which 18 are newbuildings to be delivered 2014-2017.
All chartered-in vessels are with options to extend the charter and include purchase options for
WB Shipholding throughout the charter.
Western Bulk Group - Legal Structure
Western Bulk ASA
Western Bulk Chartering AS
2
Western Bulk Shipholding AS
Annual Report 2013 | Key Figures
Key Figures
(USD million)
Gross revenues
Net T/C result
EBITDA
EBIT
Profit/(loss) before tax
Profit/(loss) after tax
Adjusted Profit/(loss) after tax 1)
2013
2012
2011
1,195.1
54.7
17.9
15.7
6.3
5.3
11.2
1,143.6
71.2
30.3
27.9
24.2
24.5
24.4
1,027.8
59.4
21.5
23.8
20.7
19.0
19.9
292.6
119.0
111.8
249.7
65.3
106.1
238.6
77.0
73.2
1.5
3.5
(16.8)
(11.7)
28.6
11.1
(39.1)
0.6
Total assets
Cash
Total equity
Cash flow from operations
Cash flow from investments
Cash flow from financing activities
Total cash flow
(22.3)
25.7
50.3
53.7
KPI's WB Chartering
Net T/C result (mUSD)
Net TC Margin per ship day (USD)
Average number of ships operated
Number of ship days
Number of voyages
54.6
979
153
55,761
1,219
67.3
1,426
129
47,194
1,064
55.8
1,479
103
37,693
935
0.1
24
3.9
1,528
3.7
3,397
Owned vessels:
Average number of ships owned 2)
Number of ship days
Average TC income per ship day (USD)
Average Opex per ship day (USD)
Net TC margin pr ship day (USD)
1
364
12,447
7,647
4,800
1
366
13,963
5,484
8,479
1
406
14,175
5,503
8,672
Leased vessels:
Average number of ships leased 3, 4)
Number of ship days
Average TC income per ship day (USD)
Average TC expense per ship day (USD) 5)
Net TC Margin per ship day (USD)
8
2,913
13,724
14,534
(810)
6
2,160
14,843
14,827
16
2
679
16,684
18,198
(1,514)
KPI's WB Shipholding
Net T/C result (mUSD)
Net TC Margin per ship day (USD)
3)
4)
Profit/(loss) after tax, adjusted for any unrealized mark-to-market effect from derivatives related to hedges for future results and certain one-off adjustments
Includes ships that are owned by more than 50%, and thus fully consolidated.
Includes leased ships that are on the water, not including vessels that are under construction/not yet delivered.
Includes 3 vessels that are chartered in from Western Alterna Partnership (‘WAP’) and re-let both to WB Chartering and external parties at about break-even
level for WB Shipholding. WB Shipholding owns 20% in WAP.
5)
Includes Opex on one ship chartered in on bare-boat terms.
1)
2)
111.8
Average
number of
ships operated
USD
million
120
80
60
Ships
USD million
100
40
20
0
2013
2012
Year
2011
180
160
140
120
100
80
60
40
20
0
153 Ships
Profit
after tax
5.3 USD
million
30
25
USD million
Total book
equity
20
15
10
5
2013
2012
Year
2011
0
2013
2012
2011
Year
3
Letter from Mr Jens Ismar, CEO | Annual Report 2013
Jens Ismar, CEO
4
Annual Report 2013 | Letter from Mr Jens Ismar, CEO
Letter from Mr Jens Ismar, CEO
2013 has been a very special year for Western Bulk. Market-wise, we were facing widely
­different environments, with three first quarters of the year being the most challenging period
since the financial crisis with low rates and almost no volatility in these rates. Then, during
September, the market took off to see surprisingly healthy levels during the 4th quarter. With
our business model, based on utilizing volatility to create margins, the year turned out to be
challenging and somewhat disappointing for our margins. In addition to the weak market rates
for the first three quarters, margins were impacted negatively by a geographical positioning
that turned unfavorable when the market rates increased unevenly in different regions of the
world in the fourth quarter. On the positive side, growth continued at a strong pace, both in
WB Chartering and in WB Shipholding.
Much more importantly, however,
2013 has been a very busy year for
our efforts to position the Company
for the coming years.
To ensure we have the resources
necessary to run and continue to
expand our core Chartering division
and the Shipholding division we
placed an unsecured bond loan in
April of NOK 300 mill and successfully completed an IPO at the Oslo
Stock Exchange in October. Both
these transactions were very
important milestones in the further
development of Western Bulk as
leading dry bulk company.
In the Chartering division we have
had record activity. An average of
153 vessels operated means more
than 18 percent increase from last
year. In November, our fleet reached
an all-time high of 191 vessels.
This would not have been possible
without the hard and dedicated
work in developing new relationships by our teams both with new
cargo holders and ship owners
worldwide. The substantial volume
growth was also only possible
through our continued development and use of our risk control
and other management systems
together with a constant attention
to human capital resources, which
are all critical elements in the
future development and success of
Western Bulk.
options and purchase options
without having to commit equity or
involving any covenants.
Alongside the above volume
growth we have also pursued a
deliberate strategy to use what
we perceive as a low point in the
market to build a significant book
of time charter extension options
in WB Chartering. These are options
to extend current charter-in contracts
at fixed rates or optionality in form
of flexible number of days that a
current charter will last, which in
total amounted to 34,000 days at
the end of 2013. We firmly believe
the size of this option book is
unique and unprecedented, and
gives Western Bulk a very
attractive exposure to potentially
firming market rates in the future.
We used 2013 to position ourselves
putting down some very important
cornerstones with potential for
growth and improved markets.
The positive market view by most
analysts was underpinned by the
strong market in fourth quarter 2013
indicating an improved market
balance and could make 2014 a very
exiting year once we are through a
normally weaker first quarter. We
are well positioned for this!
At the same time, we have
increased our exposure in the
Shipholding division taking on a
total of 11 additional long term
vessels with purchase options. We
now have a total of 27 vessels and
newbuilds in this division of which
23 are leased with options to
purchase throughout the charter
period. We find these deals to be
very capital efficient and attractive
as it gives us a significant
optionality both on extension
Jens Ismar, CEO
In the Chartering
division we have
had record activity.
An average of
153 vessels operated
means more than
18 percent increase
from last year.
Yours sincerely,
5
The Board of Directors’ Report | Annual Report 2013
Board of Directors’ Report 2013 for the Group and Parent company
2013 has been another year of growth for Western Bulk, with high activity levels in both
divisions. Moreover, it was a year with two major milestones in the capital markets.
Western Bulk is
organised in two
divisions: WB
Chartering and WB
Shipholding
The Board
Christen Sveaas
(chairman)
Kristin Gjertsen
Benedicte B. Agerup
Henning E. Jensen
Rolf A. Wikborg
The Group’s 2013
Net TC result
54.7
USD million
WB Shipholding’s fleet
counts nine vessels and
18 newbuildings
6
Main Development
The Group’s Net TC result declined
from USD 71.2 million in 2012 to
USD 54.7 million in 2013, mainly
driven by lower Net TC margin per
ship day in Western Bulk Chartering. Its Net TC margin dropped
from USD 1,426 per ship day in
2012 to USD 979 per ship day in
2013 due to the low rates and low
volatility in rates in the first three
quarters. In addition to the weak
market rates for the first three
quarters, margins were also
negatively impacted by a geographical positioning that turned
unfavorable when the market rates
increased unevenly in different
regions of the world in the fourth
quarter. Mainly as a result of the
lower Net TC result, the Group’s
EBITDA declined from USD 30.3
million in 2012 to USD 17.9 million
in 2013.
In 2013 the Group recorded a net
profit after tax of USD 11.2 million
(2012: USD 24.4 million) when
excluding the unrealized MtM
change on derivatives hedging
future periods (‘Adjusted Net
Result’), while net result after tax
when including such unrealized
MtM changes (‘Net Result’) was
USD 5.3 million (2012: USD 24.5
million).
The first three quarters of 2013 had
market conditions that were very
challenging to operate in and earn
margins from, with low rate levels
and very low volatility. Entering the
fourth quarter, the Group was not
well positioned for the strong and
persistent rate upturn that
emerged, and margins were hit by
losses on geographical positions.
On a positive note, the Group used
the low rate market in the first
three quarters to actively pursue
and conclude charter-in contracts
at attractive rate levels with
significant optionality (options to
extend the charter-in period at fixed
rates) for future periods in both
divisions. For WB Shipholding, this
activity included 11 additional time
charters with purchase options.
Western Bulk entered the capital
markets twice in 2013: In April the
Group issued its first unsecured
bond loan (NOK 300 million) in the
Norwegian bond market, and in
October Western Bulk ASA went
from being a privately owned
company to a public listed
company on the Oslo Stock
Exchange. Western Bulk’s financial
position was significantly strengthened in 2013 by new equity raised
through the IPO, sale of non-core
financial assets and debt capital
raised by the bond issue. This gave
net proceeds of USD 35.5 million
from the new equity and USD 27.3
million from the sale of non-core
financial assets. Kistefos AS is still
the majority owner of Western Bulk
ASA, and currently owns 60.4% of
the outstanding shares.
The Board of Directors is disappointed with the result for the year,
and especially so for the trading
performance in the fourth quarter.
Business Overview
Western Bulk is a world leading
operator of dry bulk tonnage in the
Supramax/Ultramax vessel sizes
and is also operating Handysize
and Panamax vessel sizes.
Western Bulk is organized into two
divisions: WB Chartering and WB
Shipholding.
Western Bulk Chartering combines
operational expertise in dry bulk
shipping with portfolio and risk
management techniques and
approaches adapted from the
financial industry. Given the
diversity and complexity of the
markets in which Western Bulk
Chartering operates, it has chosen
to build a flat and decentralized
organisational structure where
decision-making authority rests
with its seven business units. An
advanced risk control system and a
risk management team monitor
market and counterpart exposures
of each business unit and on an
aggregate level for the Group.
Western Bulk Shipholding was
established in 2009, with the aim of
investing in and controlling dry bulk
vessels. The division operates
separate from Western Bulk
Chartering, and vessels are chartered
out both to Western Bulk Chartering
and third parties.
Annual Report 2013 | The Board of Directors’ Report
The bell ceremony at Oslo Stock Exchange on 25th October 2013 marking the first day of trading for Western Bulk’s shares. From the left: Benedicte Bakke Agerup (Member
of the Board), Kristin Gjertsen (Member of the Board), Christian V. Christensen (Group Executive Vice President, WB Shipholding and Atlantic), Bente A. Landsnes (President
& CEO Oslo Børs), Jan Christian Tungland (Vice President, Steel & Bulk), Rolf A. Wikborg (Member of the Board), Jens Ismar (CEO), Henning E. Jensen (Member of the
Board), Egil Husby (CRO), Håvard Furu (CFO), Knut J. Krogsrud (General Manager Shipowning), Marianne Loe (Business Controller), Cathrine Fosse (Head of Treasury &
Business Control) and Tormod Teig (Corporate Risk Manager).
Western Bulk Chartering
Western Bulk Chartering’s seven
business units are located in our
five offices in Oslo, Monaco,
Singapore, Seattle and Santiago
de Chile. During 2013 Western Bulk
Chartering operated an average of
about 153 vessels worldwide,
compared to 129 vessels in 2012
and 103 vessels in 2011. The
intention over time is to further
increase the number of vessels
operated, focusing on quality
tonnage with eco-friendly design
and reduced fuel consumption.
Western Bulk Chartering‘s EBITDA
in 2013 was USD 21.1 million,
compared to USD 29.3 million in
2012. The decline in the EBITDA in
2013 is due to the factors
described in the section Main
Development above.
Western Bulk Shipholding
Western Bulk Shipholding is located
in our offices in Oslo and Singapore.
In 2013 it increased its fleet by
adding 11 long term chartered-in
Supramax and Ultramax vessels
with purchase options at attractive
rate levels. All are newbuildings that
will be delivered in the period 2014
to 2017. As of 31 December 2013
the fleet counted nine vessels plus
18 newbuildings. Four of the vessels
are partly owned and the remaining
vessels and newbuildings are all
chartered-in tonnage with purchase
options and options to extend the
charters. Western Bulk Shipholding‘s EBITDA in 2013 was USD -2.1
million, compared to USD 1.9 million
in 2012. The decline in the EBITDA
in 2013 was mainly due to a default
by one counterparty on two time
charters during the year. When the
vessels were redelivered to WB
Shipholding, the rates obtained
from their new employment were
significantly lower than the rates
paid by the original charterer.
Market Development
Supramax spot rates started the
year at USD 7,654 per day and
continued for almost three quarters
at low levels between USD 7,000
and USD 10,000 per day and with
generally very low volatility in the
rates. In second half of September,
rates started to increase above those
levels, and climbed to USD 15,195
per day at the end of December, a
98% increase over the year.
Share Price Development
Western Bulk shares were listed on
Oslo Stock Exchange with the first
day of trading on 25th October
2013. The shares commenced
trading at NOK 12.00 per share.
The share price increased by 33%
to end at NOK 16.00 per share on
the last trading day of 2013 (30th
December), which corresponds to a
market value of about NOK 2.5
billion (approx. USD 410 million) for
all outstanding shares in Western
Bulk ASA.
Dividend Policy and
Proposed Dividend
Western Bulk ASA intends to pay
regular dividends to its shareholders on a semi-annual basis of
75%-100% of its Adjusted Net Results
(net result after tax excluding
unrealised gains and losses on
derivatives held to hedge future
results). Distribution of dividend
will normally take place subsequent to approval of Annual
Reports and the Interim financial
reports for the second quarter.
The Adjusted Net Result for
2013 amounts to USD 11.15
million. A dividend of USD 7.7
million was paid for the first half of
2013, and a dividend NOK 0.12 per
share (corresponding to USD 3.1
million) is proposed for the second
half of 2013, bringing the total
dividend for the financial year 2013
up to USD 10.8 million, which
equals 97% of the Adjusted Net
Result for the year.
Western Bulk’s business
scope is described in
article 3 of its articles
of association:
“To own, lease and
operate vessels, chartering and operator
activities, preparation
of and participation in
financial transactions
and related activities,
including participation
in companies with
similar business”.
WB Chartering in 2013
153
vessels
operated
Newbuilds added to
WB Shipholding’s fleet
11
Total fleet increased from 16 to
27 vessels and newbuilds, of
which 23 are chartererd-in with
purchase options
7
The Board of Directors’ Report | Annual Report 2013
Tonje B. Nilsen. Marine accountant in WB Shipholding.
The Group’s Turnover
1,195
USD million
Financial Performance
The Group’s turnover, expressed as
gross freight revenues, increased
from USD 1,144 million in 2012 to
USD 1,195 million in 2013 (increase
of 4,5%). The higher gross revenue
was mainly due to the increased
fleet, partly offset by lower average
freight rates for the fleet.
As discussed above, the Group’s
EBITDA declined from USD 30.3
million in 2012 to USD 17.9 million in
2013, mainly due to the reduced Net
TC result.
Net financials for the Group was
USD 9.4 million (expense) in 2013,
and consisted mainly of USD 3.5
million in interest expenses, USD 0.2
million in currency gain, USD 1.0
million in share of negative result
from associated companies, USD
3.8 million in non-recurring
expenses related to disposal of
financial assets (including related
derivatives), and USD 1.7 million in
8
unrealized fair loss on derivatives
related to hedges in the ordinary
business of the Group.
The Group’s cash position was USD
119.0 million as of 31.12.2013, of
which USD 9.1 million was restricted
cash, compared to USD 65.3 million
and USD 5.5 million as of
31.12.2012. The cash flow statement shows the main variables
impacting the cash position in 2013.
The key drivers for changes in the
cash position were working capital
requirements (USD -35.2 million),
disposal of financial investments
(USD 27.3 million), changes in debt
financing (USD 50.4 million) and
additional equity provided in cash
from a share issue (USD 35.5
million), less dividends paid during
the year (USD -35.5 million).
The increase in working capital was
related to a larger operated fleet as
well as an increased working capital
tied up per operated vessel during
the period. In general, the average
working capital per vessel depends
on a number of factors such as
bunker prices, freight rates, trading
pattern, mix of contract types for
vessels and cargo, and tends to
fluctuate significantly. Increased
bunker oil prices and increased
market rates usually increases the
average working capital per vessel.
The Group‘s book equity totalled
USD 111.8 million as of 31.12.2013,
a net increase of USD 5.7 million
(5 %) from the 1st of January 2013
position of USD 106.1 million.
During the year, the equity was
strengthened by new shares issued
in connection with the initial public
offering of Western Bulk ASA.
The Group’s balance sheet total was
USD 292.6 million at the end of 2013
compared to USD 249.7 million the
year before. The equity ratio was
38.2 % as of 31.12.2013 compared
to 42.5 % as of 31.12.2012.
Annual Report 2013 | The Board of Directors’ Report
Total current liabilities amounted to
USD 113.4 million as of 31.12.2013
compared to USD 120.8 million as of
31.12.2012.
The Parent company’s net result for
2013 ended at NOK 43.6 million,
compared to NOK 136.9 million in
2012. The result is mainly depending
on dividends from subsidiaries and
interest income/interest expenses
paid from and to subsidiaries as
well as to external parties. Dividends
received were reduced by nearly NOK
108 million in 2013 compared to
2012, which explains the significant
drop in the net result. The Parent
company’s equity strengthened from
NOK 455 million as of 31 December
2012 to NOK 480 million as of 31
December 2013, and was impacted
by new equity from the share capital
increase (NOK 209 million), dividends
paid (NOK - 209 million), profits for
the year (NOK 44 million) and
dividend accrued at year end (NOK
-19 million). The Parent company’s
balance sheet is sound with a book
equity ratio of 52%. The Parent
company had a net positive cash
flow in 2013 of NOK 355 million, of
which the new bond loan issue
amounted to NOK 300 million.
In accordance with §3-3a of the
Norwegian Accounting Act, the
Board confirms that the financial
statements have been prepared
under the assumption of going
concern. The assumption is based
on estimated results for 2014 and
the Group‘s long term strategy.
Subsequent events after
31.12.2013
Impact on the environment
The Group’s activities consist of
owning, chartering and operating
dry bulk vessels for the transportation of products such as minerals,
timber, cement, bauxite, steel
products, grains, coal and more. The
chartering and operation of owned
and chartered-in vessels fully
comply with international rules and
standards in the jurisdictions and
sectors in which they operate.
Organisation
Western Bulk cares about people,
human rights, labour rights, safety
and welfare. The Group is actively
working to reduce sick leave and
improve its working environment.
During the year no serious accidents
or injuries have been reported. Total
sick leave in the Norwegian company
was 1.50% (2012: 1.59%), divided into
1.36% short term absence, and 0.14%
long term absence.
Western Bulk aims to be a company
with full equality between men and
women and no discrimination
based on disability, gender, race,
ethnic or cultural background. As
of 31.12.2013, 36 of the Group’s
104 employees were women (35%).
Corporate Governance
Western Bulk is committed to comply
with national and international
legislation and regulations as well
as our own high standards. As a
listed company on Oslo Stock
Exchange, Western Bulk is subject
to corporate governance regulations and is required to report on
its corporate governance policies.
The Group has adopted and
implemented a corporate governance
regime which, in all material
respects, complies with the code
published by the Norwegian
Corporate Governance Board
(www.nues.no). Adherence to the
code is based on a ‘comply or
explain’ principle. The board’s report
on the code is included in a separate
chapter in this annual report.
In line with the requirements the
Board has established two
sub-committees; the audit
committee and the remuneration
committee, and appointed qualified
members of these two committees.
The roles and duties of the committees are defined in separate charters.
The audit committee shall provide
assistance to the Board in fulfilling
its oversight responsibility relating
to the integrity of the Group’s
financial statements and the
independent auditor’s qualifications and independence.
The audit
­committee
Benedicte B. Agerup
Rolf A. Wikborg
The remuneration
committee
Christen Sveaas
Kristin Gjertsen
6.4
million
tonnes
Fertilizers
Of the 6.4 million tonnes of
fertilizers carried by Western
Bulk in 2013, 1.7 million
tonnes was urea. This is
enough urea to fertilize
approximately 99,000km2
of grain or cotton fields.
About the same size as
South Korea.
The remuneration committee has
the overall responsibility for
evaluating the Group’s remuneration plans, policies and programs
related to remuneration of the
Group’s board members, senior
management and employees.
Risk
As a world leading player in the dry
cargo shipping market, Western Bulk
is exposed to a number of risks. In
addition to the market risks associated with its two divisions, the Group
is also exposed risks including, but
There are no material events
subsequent to the balance sheet
date of 31.12.2013.
Corporate Social Responsibility
The Group has adopted guidelines
for social responsibility, describing
the corporate values, business
principles, environmental principles
and human rights and workplace
practices. These guidelines can be
reviewed on www.westernbulk.
com. Reference is made to the
separate report on Corporate
Social Responsibility included in
the annual report.
From left: Petter Haraldson
(Chartering, Steel&Bulk),
Jan Christian Tungland
(Vice President, Steel & Bulk)
9
The Board of Directors’ Report | Annual Report 2013
6.2
million
tonnes
Coal
In 2013 Western Bulk carried
6.2 million tonnes of coal.
At least 40% of the world’s
electricity comes from coal
(IEA 2011). 6.2 million tonnes
of coal can generate 15.2 bn
kWh, enough to power 1.4
million average US homes
for a year.
not limited to counterparty risk,
credit risk, currency risk, interest
rate risk, operational risk, asset
value risk and liquidity risk.
The Group is committed to manage
risks in a sound manner related to
its businesses and operations. The
organization emphasizes risk
aware­ness in the business and the
different markets and environments
the Group operates in, implementing measures and internal control
routines to mitigate risks or
respond to risks to mitigate
potential consequences.
Even if the outlook for the dry bulk
shipping market is more positive
than the recent history, the Board
recognizes that the dry bulk shipping market may continue to be
challenging and that counterparty
risk is likely to continue at a high
level and that market rates can
fluctuate significantly. Although
Western Bulk has a diversified
exposure to counterparties, well
managed market exposure and a
wide geographical positioning, we
anticipate that the Group will be
affected by these external factors.
The Board is of the opinion that the
Group’s exposures to the different
risks are satisfactorily monitored
and that we will be able to contain
the risk at acceptable levels, for
customers as well as shareholders.
Kjetil Høntorp
(Operations manager,
WB Shipholding)
10
Market Risk
The Group has invested considerable resources in establishing a
risk control and monitoring system
which quantifies the market
exposure in WB Chartering on a
daily basis. This system allows
WB Chartering to measure risk and
adjust its risk profile if so required.
WB Chartering actively uses
derivatives such as freight forward
agreements (FFA), bunker swaps
and other financial instruments
to hedge its market exposure.
WB Chartering is not seeking to
minimize the market risk, but rather
to quantify and measure it to be
able to take calculated exposures
in the market. The risk system
sets absolute limits to the level of
exposure taken by WB Chartering.
Such exposure may include being
long/short vessels relative to contract coverage, being long/short on
geographical areas, vessel sizes
and trade routes, utilizing options
on cargoes and vessels, and more,
to take market rate exposures.
For WB Shipholding, the market risk
exposure is measured and monitored
by using sensitivity analysis for cash
flow and earnings for the part of
the fleet that is without longer term
employment at fixed rates.
Operational Risk
The Group is exposed to various
operational risks conducting its
worldwide business with vessels
sailing and calling ports in most
areas of the world. The operational responsibility rests with the
Group’s business units, as most
operational risks are related to
specific vessels, cargoes or markets. While single incidents mainly
will have limited impact to the
Group, the Group is paying close
attention to concentration of risks
related to cargo type, geographical
area and counter­parties, targeting
diversification to mitigate exposure
that potentially can cause material
effects.
Financial Risk
The Group‘s credit risk mainly
relates to freight payable from our
counterparts for voyages being
performed. Such freight is mainly
due at commencement of the
voyage, and if not paid, the Group
would have a lien on the cargo. As
such, the credit risk is limited, and
mainly relates to any potential
disputed parts of the freight
invoiced such as laytime and
demurrage upon discharge.
The Group‘s liquidity risk is mainly
related to timing of cash in- and
outflows and the Group continuously monitors its cash reserves
and available liquidity to ensure
sufficient liquidity is available to
Annual Report 2013 | The Board of Directors’ Report
meet known obligations of its
operations, minimum liquidity
covenants in financing agreements,
and to meet measured cash flow
risks related to the use of derivatives for hedging purposes.
The Group’s interest rate risk is
mainly related to its interest-bearing
debt. The Group has floating interest
rates on its debt, and the existing
policy is to maintain this position.
The Group measures its interest
rate risk by sensitivity analysis.
The Group is exposed to currency
risk, mainly for expenses incurred
in local currency other than the
US dollar, and for its outstanding
bond loan that is denominated in
Norwegian kroner (NOK). The
Group measures its currency risk
applying sensitivity analysis, and
has hedged the principal amount
of the bond loan using currency
collars for the NOK against the
US dollar.
The Group has a number of
financial covenants related to its
interest-bearing debt and certain
other obligations. The Group monitors the various relevant ratios and
figures to be able to react to situations where a covenant breach is
threatening.
Future Development
Reference is made to the risk factors described above.
The outlook for the dry bulk shipping market for 2014 is improved
compared to the market conditions
seen in 2013. The supply/demand
imbalance situation that has hampered the market for several years
is expected to start improving
during the year as delivery of new
vessels, net of recycling of older
tonnage, is expected to be less
than demand growth. This should
contribute to improved rates as
well as more volatility in rates.
Western Bulk is well positioned to
benefit from higher rates and more
volatility with a chartered-in fleet at
attractive rate levels for the firm periods as well as significant amount
fixed price extension options for
the chartered-in fleet.
Western Bulk Chartering is expected to continue to grow its fleet in
2014, targeting an average fleet
size of 170 vessels or more compared to the average of 153 vessels
in 2013. Western Bulk Shipholding
will take delivery of six new built
vessels on long term charter with
purchase options in 2014, increasing the sailing fleet to 15 vessels
by the end of the year. In addition,
the division will carefully consider
opportunities to increase the fleet.
Allocation of profit and dividend
The board’s proposal for allocation of the net profit for the year for the Parent company Western Bulk ASA is as
follows:
Profit for the year
Dividend
Transfer to retained earnings
Total allocations
NOK
NOK
NOK
NOK
43,644,932
18,959,862
24,685,070
43,644,932
Oslo, February 27, 2014
Christen Sveaas
Chairman of the Board
Henning E. Jensen
Rolf A. Wikborg
Benedicte B. Agerup
Kristin Gjertsen
Jens Ismar
CEO
11
The Board of Directors | Annual Report 2013
The Board of Directors
Christen Sveaas
Henning E. Jensen
Benedicte Bakke Agerup
Rolf A. Wikborg
Chairman of the Board
Independent board member
12
Board member
Independent board member
Kristin Gjertsen
Independent board member
Annual Report 2013 | WB Shipholding’s Fleet
WB Shipholding - Fleet and deliveries as per 31.12.2013
The table below shows the vessels sizes and expected delivery time for the newbuilds and Western Bulk’s share.
Name
WB Shipholding
Dwt
Built/Est. delivery
Owned/ Chartered
WB share
1 Western Stavanger
32,000
2010
Owned
2 Western Oslo
56,000
2008
Chartered with purchase option
100 %
51 %
3 Western Tokyo
56,000
2012
Chartered with purchase option
100 %
4 Western Kobe
58,000
2012
Chartered with purchase option
100 %
5 Western Ehime
58,000
2012
Chartered with purchase option
100 %
6 Maine Dream
58,000
2012
Chartered with purchase option
100 %
7 TBN 1
37,000
End Q1 2014
Chartered with purchase option
100 %
8 TBN 2
37,000
Q3 2014
Chartered with purchase option
100 %
9 TBN 3
61,000
Q1 2015
Chartered with purchase option
100 %
10 TBN 4
61,000
Q4 2014 - Q1 2015
Chartered with purchase option
100 %
11 TBN 5
61,000
Q3 2014
Chartered with purchase option
100 %
12 TBN 6
63,000
Q3 2014
Chartered with purchase option
100 %
13 TBN 7
61,000
Q3 2015 - Q4 2015
Chartered with purchase option
100 %
14 TBN 8
61,000
Q4 2014 - Q1 2015
Chartered with purchase option
100 %
15 TBN 9
63,000
Q2 2016 - Q3 2016
Chartered with purchase option
100 %
16 TBN 10
60,000
Q1 2015 - Q2 2015
Chartered with purchase option
100 %
17 TBN 11
60,000
Q1 2016 - Q3 2016
Chartered with purchase option
100 %
18 TBN 12
61,000
Q3 2016 - Q4 2016
Chartered with purchase option
100 %
19 TBN 13
61,000
Q3 2016 - Q4 2016
Chartered with purchase option
100 %
20 TBN 14
60,000
Q2 2017 - Q3 2017
Chartered with purchase option
100 %
21 TBN 15
63,000
Q3 2015 - Q4 2015
Chartered with purchase option
100 %
22 TBN 16
60,000
Q2 2016 - Q4 2016
Chartered with purchase option
100 %
23 TBN 17
61,000
Q4 2014 - Q1 2015
Chartered with purchase option
100 %
24 TBN 18
61,000
Q1 2016 - Q3 2016
Chartered with purchase option
100 %
25 Western Wilton
58,000
2011
Owned
20 %
26 Western Moscow
58,000
2011
Owned
20 %
27 Western Texas
58,000
2011
Owned
20 %
Western Alterna Partnership
‘TBN' = to be named.
Delivery time of newbuildings is indicative, contracts typically specify a time-window of 6-9 months which is narrowed when time schedule of the vessel
construction is confirmed.
Western Alterna Partnership is a partnership that Western Bulk owns 20%. The Partnership owns three vessels, of which all are chartered to Western Bulk.
WB Shipholding’s fleet
counts nine vessels and 18
newbuildings. Most of the
vessels are chartered in on
time charters with purchase
options.
MV Western Stavanger
13
Consolidated Income Statement | Annual Report 2013
Consolidated Income Statement
WESTERN BULK GROUP
(USD 1,000)
Gross revenues
Note
5
2013
2012
1,195,078
1,143,580
Voyage expenses
(558,291)
(560,257)
T/C expenses
(570,175)
(500,551)
Other vessel expenses
(11,919)
(11,617)
Net T/C result
54,693
71,155
(35,833)
(39,922)
Administration expenses
Tonnage tax
6, 8
9
Result before depreciation and impairment, finance items and income tax (EBITDA)
Depreciation
13
Operating profit/(loss)
10
Financial expenses
10
Share of profit/(loss) from associates
Unrealised fair value gain/ (loss) on derivatives
503
(906)
30,327
(2,474)
27,853
100
(3,486)
(3,239)
12
(965)
(643)
17
(1,658)
(457)
17, 22
(3,795)
572
Profit before tax from continuing operations
Income tax expense
(2,157)
15,739
Financial income
Fair value gain/(loss) on financial assets incl. related derivatives
(963)
17,896
6,338
9
Profit for the year from continuing operations
(1,049)
24,186
325
5,289
24,511
5,522
24,386
Attributable to :
Equity holders of parent
Non-controlling interest
(233)
Total
14
125
5,289
24,511
Earnings per share - basic (USD)
11
0.04
0.18
Earnings per share - diluted (USD)
11
0.04
n.a.
Annual Report 2013 | Consolidated Statement of Comprehensive Income
Consolidated Statement of Comprehensive Income
WESTERN BULK GROUP
(USD 1,000)
Note
Profit for the year
2013
2012
5,289
24,511
Other comprehensive income
Items that will not be reclassified to income statement
Net actuarial gain/ (loss)
7
Total
(793)
2,963
(793)
2,963
Items that will be reclassified to income statement
Fair value adjustment avaliable-for-sale financial assets
Total
Other comprehensive income
Total comprehensive income
17
0
(1,177)
0
(1,177)
(793)
1,786
4,496
26,296
4,730
26,171
Attributable to :
Equity holders of parent
Non-controlling interest
Total
(233)
4,496
125
26,296
15
Consolidated Balance Sheet | Annual Report 2013
Consolidated Balance Sheet
WESTERN BULK GROUP
(USD 1,000)
Note
2013
2012
Non current assets
Deferred tax asset
9
2,163
2,163
Property, plant and equipment
13
21,774
23,385
12
9,215
9,940
215
22,781
Investment in associates
Investment in financial assets
Derivatives
15, 17
17
Long term receivable
Total non current assets
4,803
6,537
1,870
1,710
40,040
66,516
Current assets
Bunker stocks
14
55,196
52,276
Accounts receivable
17
72,053
52,488
Other receivables
4,821
3,981
17
1,464
9,141
4
3
16
119,011
65,316
Total current assets
252,550
183,205
TOTAL ASSETS
292,590
249,721
Derivatives
Other financial assets
Bank deposits
16
Annual Report 2013 | Consolidated Balance Sheet
WESTERN BULK GROUP
(USD 1,000)
Note
2013
2012
11,614
9,914
EQUITY AND LIABILITIES
Equity
Share capital
19
Share premium
49,211
15,379
Other paid-in capital
15,304
16,308
Retained earnings
29,731
59,346
Available for sale reserves
0
Non-controlling interests
(1,177)
5,986
6,290
111,845
106,059
9
1,230
1,152
Total equity
Long term liabilities
Deferred tax liability
Pension liabilities
7
3,290
1,399
Derivatives
17
294
2,042
Interest-bearing debt
20
59,581
11,594
Other long-term liabilities
2,976
6,662
Total long term liabilities
67,371
22,850
Accounts payable
36,566
28,704
Prepaid freight
28,423
21,927
5,285
1,568
1,933
1,439
25,131
39,379
5,307
5,200
Current liabilities
Prepaid income
Taxes payable
9
Accrued cost
Provisions
21
Bank overdraft
16
0
31
Interest-bearing debt, current portion
20
1,325
1,325
Other current liabilities
9,402
21,238
Total current liabilities
113,373
120,812
Total liabilities
180,745
143,662
TOTAL EQUITY AND LIABILITIES
292,590
249,721
Oslo, February 27, 2014 The Board of Directors Western Bulk ASA
Christen Sveaas
Henning E. Jensen
Rolf A. Wikborg
Benedicte Bakke Agerup
Jens Ismar
Chairman of the Board
Kristin Gjertsen
CEO
17
Consolidated Statement of Changes i Equity | Annual Report 2013
Consolidated Statement of Changes in Equity
WESTERN BULK GROUP
Share
capital
Share
premium
Other
paid-in
capital
Retained
earnings
9,914
15,379
16,308
59,346
Profit & loss
-
-
-
5,522
Other comprehensive income
-
-
-
-
-
-
-
1,177
1,177
-
1,177
1,700
38,672
-
-
-
40,372
-
40,372
(USD 1,000)
December 31, 2012
Reversed available-for-sale reserve
Share capital increase
Share issue expenses
-
Share options
-
-
Dividend
-
-
Transactions with non-controlling
interest
-
-
-
Put option from owner without
consideration 1)
-
-
118
11,614
49,211
15,304
December 31, 2013
1)
18
(4,839)
Additional put options received for certain financial assets.
(793)
Available
for sale
reserves
(1,177)
-
-
-
-
89
-
-
(1,212)
Noncontrolling
Total
interest
99,770
5,522
(793)
(4,839)
89
6,290
(233)
-
-
Total
equity
106,059
5,289
(793)
(4,839)
89
(34,288)
-
(35,500)
(35,500)
(56)
-
(56)
-
-
118
-
118
29,731
0
105,861
5,986
111,845
(71)
(126)
Annual Report 2013 | Consolidated Statement of Cashflow
Consolidated Statement of Cash Flow
WESTERN BULK GROUP
(USD 1,000)
Note
2013
2012
6,338
24,186
9
(1,466)
(3,347)
Ordinary depreciation
13
2,157
2,474
Unrealised fair value gain (loss) on derivative financial instruments
17
1,126
1,324
CASH FLOW FROM OPERATIONS
Profit/(loss) before tax
Taxes paid
Impairment
12, 15
Share of (profit)/loss from associates
12
Gain/(loss) disposal assets
3,795
Changes in bunker stocks, current receivables and current liabilities
Net cash flow from/(to) operating activities
965
(A)
(572)
643
(1)
(35,214)
(23,197)
(22,300)
1,510
CASH FLOW FROM INVESTMENTS
Investments in property, plant and equipment
13
Investment in/disposal of financial assets
Investment in associates
12
Changes in long term receivables
Net cash flow used in investing activities
(547)
26,603
(B)
(707)
4,120
(244)
265
(160)
(154)
25,652
3,524
(19,408)
CASH FLOW FROM FINANCING ACTIVITIES
Changes in interest-bearing short term and long term debt
20
50,437
Dividend paid
19
(35,500)
Equity received from/(paid to) non-controlling interest
19
Share capital increase
19
Net cash flow from/ (used in) financing activities
Net change in cash and cash equivalents
(126)
35,532
(5,352)
7,997
(C)
50,343
(16,763)
(A+B+C)
53,696
(11,728)
Cash and cash equivalents at start of the period
16
65,316
77,044
Cash and cash equivalents at end of the period
16
119,011
65,316
Restricted bank deposits at the end of the period
Available cash and cash equivalents at the end of the period
9,118
5,506
109,894
59,810
19
Notes to the accounts | Annual Report 2013
Notes to the accounts
Note 1 – General information
Western Bulk ASA is a public limited company incorporated
and domiciled in Norway. The address of the registered office is
Henrik Ibsensgt. 100, N-0255 Oslo.
Western Bulk ASA is a chartering and shipholding company,
operating in the dry bulk shipping market. The chartering division
is a world leading charterer of Supramax/Ultramax, Handysize and
Panamax vessels, running a fleet of an average of 153 vessels in
2013. The shipholding division holds a fleet of modern Handysize
and Supramax/Ultramax vessels and newbuilds. The Group
employed 104 people as of December 31, 2013.
This version of the consolidated financial statements is authorized
for issue by the Board of Directors as of February 27, 2014.
Note 2 – Significant accounting policies
2.1 Basis of preparation
The consolidated financial statements of Western Bulk ASA and its
subsidiaries (the “Group”) are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
The accounting policies also comply with IFRS as issued by the
International Standards Board (IASB).
The consolidated financial statements have been prepared on a
historical cost basis with exception of available for sale financial
assets and derivative financial instruments that are carried at fair value.
The consolidated financial statements are presented in USD 1,000.
Figures in all notes to the financial statements are also presented
in USD 1,000 unless otherwise specified.
2.2 Basis of consolidation
The consolidated financial statements comprises of the financial
statements of Western Bulk ASA and all its subsidiaries, which are
entities that are controlled by Western Bulk. Control is normally
achieved through ownership, directly or indirectly of more than 50
% of the voting power. Share options, convertibles and other equity
instruments are also evaluated when assessing whether control
exists.
Subsidiaries are consolidated from the date of acquisition, being
the date the on which the Group obtains control, and consolidation
is continued until the date when such control ceases. The financial
statements of the subsidiaries are prepared for the same reporting
period as the Parent company, using consistent accounting
principles. All intra-group balances, transactions, unrealized gains
and losses resulting from intra-group transactions and dividends
are eliminated in full.
Equity in subsidiaries that are not attributable to the owners of
Western Bulk ASA, are presented separately as non-controlling
interest within equity even if it results in a deficit balance.
2.3 Investments in associates
An associated company is an entity in which the Group has
significant influence. Significant influence normally exists when
the Group has 20 % to 50 % of the voting rights unless other terms
and conditions affect the Groups influence. Currently, one investment where the Group holds between 20 %- 50 % is classified as
an available for sale financial asset and not as an associate.
20
The investments in associates are accounted for using the equity
method. Such investments are initially recognised at cost. Cost
includes the purchase price and other costs directly attributable to
the acquisition such as professional fees and transaction costs.
Under the equity method the interest in the investment is based on
the Group’s proportional share of the associate’s equity, including
any excess value and goodwill. The Group recognises its share of
net income, including depreciation and amortisation of excess
values and any impairment losses, in Share of profit/(loss) of
associates. Unrealised gains and losses resulting from transactions between the Western Bulk and the associate are eliminated
to the extent of the interest in the associate.
The financial statement of the associate are prepared for the same
reporting period as the Group. When necessary, adjustments are
made to bring the accounting policies in line with those of the Group.
After application of the equity method, the Group determines
whether it is necessary to recognise an impairment loss.
2.4 Foreign currency
The Group’s consolidated financial statements are presented in
USD, which is also the Parent company’s and most subsidiaries’
functional currency.
Transactions in foreign currency are initially recorded by the Group
entities’ functional currency at the exchange rate at the time of the
transaction. Monetary items in foreign currency are translated to
functional currency using the exchange rate at the balance sheet
date. Non-monetary items that are measured at the historic
exchange rate in foreign currency are translated using the
exchange rates at the date of the initial transactions.
2.5 Segments
Segments are identified based on the organisation and reporting
structure used by management.
Operating segments are components of a business that are
evaluated regularly by the chief operating decision maker for the
purpose of assessing performance and allocating resources. The
Groups chief operating decision maker is the CEO.
Operating segments with similar product and services, similar
production processes, similar type of customers and that have
similar economic characteristics, are aggregated into reportable
segments.
The Group has two reportable segments; WB chartering and WB
shipholding. Both segments have worldwide activities. Costs not
directly attributable to the segments are attributed to the segment
“Other” in Note 4 Segment information.
The shipping market in general offers a global service covering major
global trade routes. This is also the matter for the Group. Due to
this, financial position is not allocated to geographical segments.
2.6 Financial position classification
Assets and liabilities are classified as current when (i) it is expected
to be settled within the normal operating cycle, (ii) it is due to be
realized or settled within twelve months from the balance sheet
date, or (iii) it is hold primarily for the purpose of trading.
Next year instalments on long-term debt are classified as current
liabilities.
Annual Report 2013 | Notes to the accounts
2.7 Related parties
Parties are related if one party has the ability, directly or indirectly,
to control the other party or exercise significant influence over the
party in making financial and operating decisions. Parties are also
related if they are subject to common control or common significant
influence. Transactions with related parties are disclosed in note 22.
2.8 Revenue recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Group and the revenue can be
reliably measured, regardless of when the payment is being made.
Revenue is measured at the fair value of the consideration received
or receivable.
Freight revenue includes revenue from Contracts of Affreightment
(CoA), spot voyages and time charter agreements. Freight revenue
is recognised using a percentage of completion method. Revenues
and expenses related to a vessel’s voyages are accrued based on
the number of days of the voyage before and after the end of each
accounting period. A voyage is normally defined as starting after
unloading the previous voyage (discharge-to-discharge). Hence the
voyage result is also accrued with the inclusion of actual number
of days resulting from the period of ballast and loading the vessel.
If a new contract is not entered into after discharging or redelivery to
the Group, the discharge-to-discharge principle is suspended until new
employment is arranged for the vessel. When such cases occur over
a period end, these are reviewed and all costs (cost from last voyage
end date until period end) are estimated, expensed and booked until
a new contract (CoA, spot voyage or T/C) is entered into. No revenue
is recognised for this period. Once new employment is arranged
for the vessel, the revenue recognition commences and is recognised
over the period until next discharge (COA or Spot) or redelivery (T/C).
2.9 Taxes
Parts of the Group are organized in compliance with the Norwegian
tonnage tax regime (‘NTT’) and the Singaporean shipping tax
regime (‘AIS’). Other companies in the Group are not within this regime.
The NTT entails no tax on operating profits or tax on dividends from
companies within the scheme. Net financials, allowed for some special
regulations, are taxed on an ongoing basis, currently at a rate of 28 %.
The rate will be reduced from 28 % to 27 % with effect from
1 January 2014. A tonnage fee is charged per vessel depending on
the size of the vessel owned or leased by companies taxed under
the NTT. This tonnage tax is classified as an operating cost.
2.10 Property, plant and equipment
Property, plant and equipment is stated in the balance sheet at cost,
net of accumulated depreciation and accumulated impairment losses,
if any. Cost includes expenditures that are directly attributable to
the acquisition of the item of property, plant and equipment.
The vessels are depreciated linearly over an expected useful life of
five years (for a new-build) taking the estimated residual value into
consideration. With exception of docking and periodic maintenance,
no components of the vessels have a useful life shorter than 5 years,
and thus no components are depreciated separately. The cost of
dry-docking and periodic maintenance is considered a separate
component that is depreciated over the period until the next
dry-docking. All other repair and maintenance costs are recognised
in profit and loss as incurred.
Residual value is based on the amount that the Group currently
expects to obtain from disposal of the asset, if it had been of an
age and condition expected at the end of its useful life. The
estimate of residual value is based on broker statistics for similar
5 year old vessels, adjusted for differences related to size.
Estimated useful life and residual value are reviewed at each
balance sheet date.
2.11 Impairment of property, plant and equipment
Assessment of indications that assets may be impaired is made by
the end of each reporting period. If indications exist, recoverable
amount of the asset is estimated. If carrying value exceeds the
estimated recoverable amount, the asset is written down to its
recoverable amount. Recoverable amount is the higher of fair value
less costs to sell and value in use.
The Group regularly obtains broker estimates of the fair value of the
vessels. If the broker estimates are lower than the carrying amount,
value in use is calculated using a discounted cash-flow model. The
value in use-calculation is based on a discounted cash flow model.
The cash flows are derived from the rates estimated by “reversal of
rates to the mean”-model. This model uses the current rate as a
starting point and assumes that rates are trending towards a long-term
equilibrium, due to the cyclical nature of dry bulk shipping markets.
The projected rates are adjusted for any firm contracts for the
vessel within the period of estimated cash flows, with either freight
rates significantly above or below projected market rates.
The AIS entails no tax on operating profits from the shipping activity.
Net financials, allowed for some special regulations, are taxed on
an ongoing basis, currently at a rate of 17 %.
Tax expenses in the profit and loss account comprise both tax
payable for the accounting period and changes in deferred tax.
Deferred tax is calculated at 27 % on the basis of existing temporary
differences between accounting profit and taxable profit together
with tax deductible deficits at year end. Temporary differences
both positive and negative are balanced out within the same period.
Deferred tax assets are recorded in the balance sheet to the extent
it is more likely than not that the tax assets will be utilized.
Deferred tax liabilities/deferred tax assets within the same tax
system are recorded on a net basis.
Deferred tax is recognised in the accounts directly against statement
of comprehensive income to the extent that it relates to items
recognised in the accounts in statement of comprehensive income.
2.12 Leases
The Group differentiates between financial leasing and operational
leasing based on an evaluation of the lease contract at the time of
inception. A lease contract is classified as a financial lease when
the terms of the lease transfer substantially all the risk and reward
of ownership to the lessee. All other leases are classified as operational
leases. When a lease contract is classified as a financial lease where
the Group is the lessee, the rights and obligations relating to the
leasing contracts are recognized in the balance sheet as assets
and liabilities. The interest element in the lease payment is
included in the interest costs and the capital amount of the lease
payment is recorded as repayment of debt. The lease liability is the
remaining part of the principal. For operational leases, the rental
amount is recorded as an ordinary operating cost.
All existing leases are classified as operational leases.
2.13 Inventories
Inventories are valued at the lower of cost and net realisable value.
See Note 3 for more information.
21
Notes to the accounts | Annual Report 2013
2.14 Financial assets
Financial assets are classified in accordance with IAS 39. The
classification is determined upon initial recognition and depends
on the purpose of the asset.
All financial assets are recognised initially at fair value plus transaction
cost, in the case of assets not at fair value through profit and loss.
Fair value through profit and loss
The Group currently holds no instruments, except derivatives, that
are classified at fair value through profit and loss.
Available for sale financial assets
The Group currently holds no investments that are classified as
available for sale investments.
After initial recognition, available for sale financial investments are
subsequently measured at fair value with unrealised gains or
losses recognised as other comprehensive income in the
available-for-sale reserve until the investment is derecognised, at
which time, the cumulative gain or loss is recognised in profit and
loss. If the investment is determined to be impaired, the cumulative loss is reclassified to the income statement and removed from
the available-for-sale reserve.
Held to maturity investments
The Group currently holds no instruments that are classified as
held to maturity investments.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed
or determinable payments that are not quoted in an active market.
Loans and receivables consist mainly of trade receivables. Trade
receivables are recognised at face value less any impairment.
Provision for impairment is made when there is objective evidence
of impairment that affects the estimated future cash-flow.
2.15 Financial liabilities
Financial liabilities represent a contractual obligation to deliver
cash in the future. Financial liabilities, with the exception of
derivatives, are initially recognised at fair value net of transaction
costs directly attributable to the transaction and are subsequently
measured at amortised cost. Financial liabilities are derecognised
when the obligation is discharged through payment or when
Western Bulk is legally released from the primary responsibility for
the liability.
2.16 Derivative instruments
Western Bulk enters into derivative contracts mainly to hedge its
exposure to freight rates, bunkers price, interest rates and foreign
currency.
Hedge accounting is not applied, and all derivatives are recognised
at fair value. Realised gains and losses on derivatives are included
in operating profit together with the item the derivative relates to.
Unrealised changes are reported as a separate line item and are
not included in operating profit.
2.17 Provisions
Provisions are recognised when there is a present obligation (legal
or constructive) as a result of a past event, it is probable that the
Group will be required to settle the obligation, and a reliable estimate
can be made of the amount.
Provisions usually relates to legal claims and onerous contracts.
22
The Group enters into T/C contracts and freight contracts. At each
balance sheet date, it is considered whether the contracts are onerous,
meaning that the unavoidable costs of meeting the obligations under
the contract, exceeds the economic benefit to be received under it.
A provision is made if the contracts are considered onerous. The
assessment is done on a portfolio basis separately for the WB
Shipholding and WB Chartering segment. See Note 3 for more
information.
2.18 Pension
The Group has defined benefit plans and defined contribution plans.
For defined contribution plans the annual contribution is expensed.
The Group has implemented the revised IAS 19 Employee Benefits.
The cost of providing benefits under the defined benefit plan is
determined using the projected unit credit method. Actuarial gains
and losses for the defined benefit plan are recognized in full in the
period in which they occur in other comprehensive income, and
are not reclassified to profit or loss in subsequent periods.
The defined benefit asset or liability comprises the present value of
the defined benefit obligation less the fair value of plan assets out
of which the obligations are to be settled.
2.19 Share-based payments
Share-based payments of the Group are equity-settled share
options granted to employees, for which an option pricing model is
used to estimate the fair value at grant date. That fair value is
charged on a straight-line basis as an expense in the consolidated
statement of profit or loss over the period that the employee
becomes unconditionally entitled to the options (vesting period),
with a corresponding increase in equity. The social security
contribution payable in connection with the exercise of the share
options is accrued on a straight-line basis as short term liabilities,
based on the intrinsic value of the share options at the end of each
accounting period with consequent changes to the expense.
The number of such options is adjusted annually to reflect best
estimates of those expected to vest (ignoring purely marketbased
conditions) with consequent changes to the expense. Equity is
also increased by the proceeds received, as and when employees
choose to exercise their options.
If the Group modifies the terms and conditions on which the equity
instruments were granted, as a minimum, the services received
measured at the grant date fair value of the equity instruments
granted (unless those equity instruments do not vest because of
failure to satisfy a vesting condition other than a market condition)
are charged to profit or loss.
Cancellations of grants of equity instruments during the vesting
period (other than a grant cancelled by forfeiture when the vesting
conditions are not satisfied) are accounted for as an acceleration of
vesting, therefore the unrecognised remaining amount is recognised
immediately in the consolidated statement of profit or loss.
2.20 Cash flow statements
The cash flow statements are based on the indirect method.
Restricted bank deposits are recorded as cash equivalents for the
purpose of the cash flow statement and in the balance sheet, with
details disclosed in Note 16. Cash comprises cash on hand and
demand deposits. Cash equivalents are short-term, highly liquid
investments that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value.
Annual Report 2013 | Notes to the accounts
2.21 Standards, amendments and interpretations issued,
but not yet effective
The financial statements have been prepared based on standards
effective for the year ending 31 December 2013. The Group has
made early adoption of the following standards in 2012;
- IAS 19 Employee benefits (Revised)
- IFRS 10 Consolidated financial statements
- IFRS 11 Joint arrangements
- IFRS 12 Disclosure of interest in other entities
- IFRS 13 Fair value measurement
- Amendments to IAS 1 titled Presentation of Items of Other
Comprehensive Income
The Group has not yet assessed the impact of IFRS 9 Financial
instruments that have an effective date of January 1, 2015. Other
issued standards, amendments and interpretations that are not
yet effective, are not applicable for the Group, and will not have an
impact on the financial statements.
Note 3 – Significant assumptions and estimates
The preparation of the Group’s consolidated financial statements
requires management to make judgments, estimates and
assumptions. These estimates are based on the actual underlying
business, its present and forecast profitability over time, and
expectations about external factors such as dry bulk shipping
freight rates, interest rates, foreign exchange rates, oil prices and
more which are outside the Group’s and Parent company’s control.
Uncertainty about these assumptions and estimates could result
in outcomes that require a material adjust­ment to the carrying
amount of assets or liabilities affected in future periods.
The following estimates have the most significant risk of resulting
in a material adjustment in the next financial statements:
Provision for onerous contracts
The Group has a “physical” forward book of contracts that
consists of vessels leased in, vessels leased out and freight
contracts. The Group uses derivatives to hedge some of its
exposure, but hedge accounting is not applied. As the derivatives
are recognised separately at fair value on each period end, they are
not taken into consideration when considering if a provision for
onerous contracts (an impairment loss) should be recognised.
The vessels are operated and managed as a portfolio within the
two segments. All vessels can fulfill all contracts with customers.
Thus, the assessment is done on a portfolio basis separately for
the WB Shipholding and WB Chartering segment.
The Group calculates the value of the “physical” forward book of
contracts on a regular basis. Shorter contracts are valued using
the same forward rates as for measuring the fair value of
derivatives. The portfolio value also includes the value of uncovered periods for vessels leased in, as well as optional periods
available. For longer term leasing commitments in WB Shipholding, a “reversal of rates to the mean”-model is applied to calculate
the value of the “physical” forward book. This model uses the
current rates as a starting point and assumes that rates are
trending towards a long-term equilibrium, due to the cyclical nature
of dry bulk shipping markets. The model takes volatility into
consideration as well as the estimated time it will take to revert to
the mean rates. The values of any options to extend the contracts
as well as purchase options are also included.
If the value of the “physical” forward book is positive on segment
level, no provision for onerous contract is recognised. If the value
is negative, a provision for onerous contracts is recognised.
As of December 31, 2013 the value of the ”physical” forward book
was positive for both segments, and thus there were no provision
for onerous contracts.
Impairment of vessel
Western Bulk owns one vessel (Western Stavanger 51%). The
Group also has a 20 % ownership interest in three vessels through
investments associates. All vessels are reviewed for impairment,
if an impairment indicator exists.
As of December 31, 2013 the broker values were lower than the
carrying amount. This was considered an impairment indicator
and value in use was calculated.
The value in use-calculation is based on a discounted cash flow
model. The cash flows are derived from the rates estimated by the
“reversal of rates to the mean”-model as explained above. The
projected rates are adjusted for any firm contracts for the vessel
within the period of estimated cash flows, with either freight rates
significantly above or below projected market rates.
As of December 31, 2013 the estimated value in use exceeded the
carrying amount, and thus no impairment loss was recognised.
The value in use is most sensitive to changes in the expected
future cash-inflows as well as discount rate used for the discounted cash flow model. The key assumptions used to determine the
recoverable amount of vessels are disclosed and further explained
in Note 13.
Provision for disputes and claims
The Group is involved in several disputes and claims. Based upon
the Group’s own views as well as opinions received from lawyers,
provisions have been made in respect of the Group’s total
exposure. As of December 31, 2013 the total amount provided for
were USD 5.3 million. The actual outcomes of these disputes are
unknown, and it could take several years before the disputes and
claims are finally settled.
4. Segment information
The Group’s main activities are 1) Chartering, i.e. operating a fleet
of Handysize, Supramax/Ultramax and Panamax vessels owned
by third parties; and 2) Shipholding, i.e. holding a fleet of modern
Handysize and Supramax/Ultramax vessels, either through partly
ownership or long-term lease of vessels with purchase options.
The chartering and shipholding activities are located in two
separated subsidiaries; Western Bulk Chartering AS and Western
Bulk Shipholding AS. Chartering and Shipholding are also the two
reportable segments of the Group. Both segments have worldwide
activities. The shipping market in general offers a global service
covering major global trade routes. This is also the matter for the
Group. Due to this, financial position is not allocated to geographical segments.
The Group’s customer base consists of a wide range of companies. The Group’s ten largest customers in 2013 compose 15 % of
total Group revenue.
The accounting principles for the segment reporting reflect those
used by the Group.
23
Notes to the accounts | Annual Report 2013
(Note 4 continues)
(USD million)
Gross revenues, external customers
Gross revenues, inter-segment customers
Total gross revenues
Other
WB
Group
-
1,195.1
1,174.9
20.1
-
24.4
(24.4)
-
1,174.9
44.5
(24.4)
1,195.1
Voyage expenses
(557.4)
(1.5)
0.6
(558.3)
T/C expenses
(560.0)
(33.9)
23.8
(570.2)
(2.9)
(11.9)
Other vessel expenses
(9.0)
-
Net T/C result
54.6
0.1
-
Administration expenses
(32.7)
(2.1)
Tonnage tax
(0.9)
(0.1)
-
Depreciation
(0.4)
(1.8)
0.0
20.7
(3.9)
(1.1)
2.1
(0.1)
(1.5)
0.5
(0.0)
(1.4)
(3.0)
(4.5)
(4.1)
(5.5)
Operating profit/(loss) (EBIT)
Financial income
Financial expenses
Unrealised fair value gain/ (loss) on derivatives
Profit/(loss) before tax
Income tax expense
Profit/(loss) for the period
Non current assets
(1.4)
21.4
(1.1)
20.3
-
(1.1)
54.7
(35.8)
(1.0)
(2.2)
15.7
(5.4)
(9.7)
6.3
(0.9)
0.9
(1.0)
(6.3)
(8.8)
5.3
6.9
32.4
0.7
40.0
Current assets
186.2
8.0
58.4
252.5
Total assets
193.1
40.4
59.1
292.6
Equity
73.8
29.3
8.7
111.8
Equity ratio
38 %
72 %
n.a.
38 %
-
11.6
49.3
60.9
Other
WB
Group
-
1,143.6
Interest-bearing debt third parties
(USD million)
Gross revenues, external customers
Gross revenues, inter-segment customers
Total gross revenues
2012
WB
WB
Chartering Shipholding
1,130.5
13.1
-
24.1
(24.1)
-
1,130.5
37.2
(24.1)
1,143.6
Voyage expenses
(560.2)
(0.2)
0.2
(560.3)
T/C expenses
(500.0)
(24.5)
23.9
(500.6)
(3.0)
(11.6)
Other vessel expenses
(8.6)
-
Net T/C result
67.3
3.9
-
Administration expenses
(37.2)
(1.9)
Tonnage tax
(0.8)
(0.1)
-
Depreciation
(0.4)
(2.1)
0.0
(0.3)
(0.8)
Operating profit/(loss) (EBIT)
Financial income
Financial expenses
28.9
(0.9)
71.2
(39.9)
(0.9)
(2.5)
27.9
2.6
0.2
(2.8)
0.1
(2.7)
(1.1)
(0.1)
(3.9)
Unrealised fair value gain/ (loss) on derivatives
(0.1)
Profit/(loss) before tax
28.8
(1.1)
0.2
(3.5)
Income tax expense
(0.5)
0.1
0.7
Profit/(loss) for the period
28.3
(1.0)
(2.8)
Non current assets
0.1
24.2
0.3
24.5
14.6
34.9
17.1
66.5
Current assets
163.8
7.6
11.8
183.2
Total assets
178.4
42.4
28.9
249.7
Equity
50.6
27.0
28.5
106.1
Equity ratio
28 %
64 %
n.a.
42 %
-
12.9
-
12.9
Interest-bearing debt third parties
“Other” contains Parent company items and elimination of intra-group transactions.
24
2013
WB
WB
Chartering Shipholding
Annual Report 2013 | Notes to the accounts
Note 5 – Gross revenues
(USD 1,000)
2013
2012
Time charter
213
134
Voyage charter
956
978
26
31
1,195
1,144
Relet
Gross revenues
Generally gross revenue at Western Bulk (Western Bulk Chartering and Western Bulk Shipholding) is derived from three different voyage types.
Time charter: Western Bulk enters a Time charter contract with a charterer, to charter out a vessel for a stated period of time or for a
specified round-trip voyage or, occasionally, for a stated one-way voyage against a stated rate of hire per day.
Voyage charter: Western Bulk enters a Voyage contract with a charterer to transport commodities from one or multiple load ports to one
or multiple discharge ports, against a stated price per metric ton transported. This voyage type can comprise of long term Contracts of
Affreightments (COA) or spot market voyages.
Relet: Western Bulk enters into a Voyage contract (as described above), and then subsequently sells the contract to another owner. In
this case Western Bulk becomes the charterer. The sold contract is often back to back with the original contract between Western Bulk
and Charterer, with the only difference being price per metric ton transported.
(USD million)
2013
2012
Malta
145
117
Cyprus
136
168
South Africa
Geographical split of revenues
118
84
Sweden
50
29
India
48
58
Switzerland
45
49
Thailand
44
52
Finland
41
23
Vietnam
36
31
Marshall Islands
35
28
Peru
34
21
Lithuania
32
50
Romania
30
30
Anguilla
29
33
Panama
28
14
Uruguay
27
17
Isle of Main
23
31
Jordan
21
14
Liberia
18
9
Portugal
18
18
Other
237
267
Total
1,195
1,144
The geographical distribution of revenues has been based on the customer’s (charterer’s) location.
25
Notes to the accounts | Annual Report 2013
Note 6 – Administration expenses
Payroll expenses
(USD 1,000)
Wages and bonuses
Share options
Employer's part of social security costs
Pension, contribution plans
2013
2012
20,979
26,298
89
-
2,068
2,314
528
551
Pension, benefit plans
1,711
1,169
Other benefits
1,506
1,414
26,881
31,746
8,953
8,176
35,833
39,922
104
98
Total salaries and social expenses
Other administrative expenses (Note 8)
Total
Man-labor year
A bonus sheme has been established for the employees, based on financial results and other criteria.
A provision for bonus earned in 2013 has been included in the accounts.
Principles for determination of compensation and option
program for executive management
The focus of the Company is to hire qualified managers and to pay
according to the market. Salary and remuneration of the CEO is
determined by the Board of Directors, and payment to other
employees is determined by the CEO according to guidelines from
the Board of Directors. The CFO and the CRO are defined as the
other members of the executive management.
The executive management, including the CEO principally have
five payment components:
1.Fixed salary
2.Pension scheme
3.Bonus payments (cash) based on financial results
4.Share options
5.Other benefits
Fixed salary and pension scheme for the executive management,
including the CEO, shall be on commercial terms and conditions.
The executive management, including the CEO, have a bonus
incentive scheme after which they receive a bonus payment in
cash on the basis of the financial results in WB Chartering before
bonus- and tax payments for the previous financial year. Further,
the Board has established a share option program, under which
members of the executive management, including the CEO, has
been granted share options in the Company.
The options were issued in line with the following main elements:
1.The exercise price for the options is equal to the offer price in
the IPO, with a deduction of any dividends paid to the shareholders
during the vesting period of such option.
2.The options mature in the following manner:
1/3 shall vest at the earliest 10 months after the first day of the
listing (25th Oct. 2013) and will lapse 16 months after the first
day of the listing.
1/3 shall vest at the earliest 20 months after the first day of the
26
listing, and will lapse 26 months after the first day of the listing.
1/3 shall vest at the earliest 30 months after the first day of the
listing, and will lapse 36 months after the first day of the listing.
3.The options are subject to customary regulations relating to
inter alia changes in the capitalisation, change of control (trigger
on 90%), statutory merger and de-listing, wherein a change of
control event, a statutory merger or de-listing will or may lead to
immediate maturity of the outstanding options.
4.The options are personal and not transferable.
5.Unvested options will lapse if the option holder terminates his
position at his own request.
6.The options may provide for a financial settlement at the
discretion of the Company and the Company shall be entitled to
elect a financial settlement if it does not hold treasury shares or
a mandate to issue new shares for this purpose at the time of
the exercise.
The options have a duration of up to 36 months from the date of listing.
The members of the executive management have ordinary
benefits in kind such as free use of phone, newspaper subscriptions, ordinary pension contributions, life insurance and health
insurance. In addition the CEO has a company car.
As a guideline, the Company shall not agree to severance pay for
members of executive management unless to the extent required
under applicable law or required for the Company to secure the
necessary expertise and takes place in accordance with the
fundamental principle for the Company’s salary policy for
management as stated above.
Reference is made the Corporate Governance section in the
annual report for more information about the compliance with
recommended corporate governance principles. Annual Report 2013 | Notes to the accounts
Remuneration to key management personell and the Board of Directors
Jens Ismar, CEO
Egil Husby, CRO
Håvard Furu, CFO
(USD 1,000)
Salary
2013
733
2012
697
2013
422
2012
395
2013
305
2012
280
Bonus paid
206
511
516
255
290
170
Other remuneration
76
79
6
7
5
5
Total remuneration
1,319
1,292
684
692
480
491
479
386
69
53
45
22
Pension premium/cost
The CEO is entitled to 18 months’ severance pay if he is released from his position by the Board. The CEO has the right to retire at the age
of 62, receiving 66 % of his salary as pension until the age of 67. From the age of 67, the ordinary pension scheme applies.
Number of options
(USD 1,000)
2013
Jens Ismar, CEO
1,779,990
Egil Husby, CRO
889,990
Håvard Furu, CFO
444,990
Total number of options
3,114,970
None of the options have been exercised, forfeited or has expired during 2013.
Board members receive remuneration the following year.
Remuneration paid in 2013, is therefore based on the board
members in 2012. The members of the Board of Directors received
a total of NOK 250,000 in remuneration in June 2013, which was
paid to Mr Rolf Wikborg. All other board members, were employed
by the Kistefos Group, and did not receive remuneration for the
directorships held in 2012. Remuneration of the board of directors
for 2013, is subject to approval from the annual general meeting in
2014.
Neither the board of directors or other key personnel has received
any loans or credit from the Group as of December 31, 2013.
Note 7– Pension
The Group has several pension schemes for the employees, both
contribution plans and defined benefit plans. The pension
schemes satisfy the respective statutory pension schemes.
The defined benefit plans are set up with a life insurance company
to provide pension benefits for its employees. The scheme
provides entitlement to benefits based on future service from the
commencement date of the scheme. These benefits are principally
dependent on an employees pension qualifying period, salary at
retirement age and the size of benefits from the National Insurance Scheme.
Main terms are that the employee after 30 years of service is
entitled to 66 % pension of the pension base salary at 1st of
January in the year of retirement. For the secured benefit plan, the
pension base salary is limited to 12 times the National Insurance
Scheme’s basic amount (G). The Group’s unsecured benefit plan
covers pensions for employees with salaries exceeding 12G. The
scheme also includes entitlement to disability, spouse’s and
children’s pensions. The retirement age under the scheme is aged
67 years.
The Group may at any time make alterations to the terms and
conditions of the pension scheme and undertake that they will
inform the employees of any such changes. The benefits accruing
under the scheme are funded obligations.
As of 31.12.2013 there were 38 (43 as of 31.12.12) employees in
the defined benefit pension scheme, of which 11 (11 as of
31.12.12) received pensions.
All pension schemes are valued in accordance with the IFRS (IAS
19R). Changes in the pension obligations as a result of changes in
the actuarial assumptions and variations between actual and
anticipated return on pension funds, are recognised in the balance
sheet immediately, through Other Comprehensive Income (OCI).
Explanation of assumptions used
The calculation of pension liabilities involves the use of judgement
and estimates across a range of parameters. The discount rate is
set at 4.1 % for Norwegian pension schemes and is based on high
quality corporate bonds (OMF).
The calculations are based on standard assumptions regarding
mortality (K2013) and disability rates (KU), together with other
demographic factors, which are prepared by Finance Norway
(FNO).
27
Notes to the accounts | Annual Report 2013
Assumptions used
(USD 1,000)
Discount rate (OMF)
2013
%
4.10
2012
%
3.90
Expected return on plan assets
4.10
3.90
Expected rate of compensation increase
3.75
3.50
Expected increase of social security base amount (G)
3.50
3.25
Expexted rate of pension increase
0.60
0.20
A bonus sheme has been established for the employees, based on financial results and other criteria. A provision for bonus earned in
2013 has been included in the accounts.
The discount rate applied as of year-end 2013 is determined by
reference to the market yield on covered bonds, plus an addition
that takes into account the relevant duration of the pension
commitments. Covered bonds are considered as high quality
corporate bonds based on recent market developments.
Sensitivity
For each of the above significant actuarial assumptions, a
sensitivity analysis has been determined based on reasonably
possible changes of the assumption occuring at the end of the
reporting period, while holding all other assumptions constant:
• If the discount rate is 0.5% higher (lower), the defined benefit
obligation would decrease by USD 801,212 (increase by
USD 947,358).
• If the expected rate of salary growth increases (decreases)
with 0.5%, the defined benefit obligation would increase by
USD 314,168 (decrease by USD 310,526).
• If the expected rate of pension increase increases (decreases)
with 0.5%, the defined benefit obligation would increase by
USD 613,000 (decrease by USD 542,305).
Pension cost recognised in income statement
(USD 1,000)
Defined contribution plans
2013
2012
528
551
Defined benefit plans
1,711
1,169
Total
2,239
1,720
2013
2012
1,441
942
54
78
Defined benefit plans
(USD 1,000)
Net periodic pension cost
Current service cost
Interest cost
Administration
5
6
211
143
Pension cost
1,711
1,169
(USD 1,000)
2013
2012
840
(3,197)
Payroll tax
Actuarial (gain)/losses recognised in OCI
Actuarial (gain)/losses on pension obligation
Actuarial (gain)/losses on plan assets
(48)
793
28
234
(2,963)
Annual Report 2013 | Notes to the accounts
2013
Net pension liabilities
(USD 1,000)
Pension scheme
Secured
Unsecured
Total
Pension liabilities
4,785
2,231
7,016
Plan assets at fair value
(4,132)
Payroll tax
Net pension liabilities
-
(4,132)
91
315
406
745
2,545
3,290
2012
Net pension liabilities
(USD 1,000)
Pension scheme
Secured
Unsecured
Total
Pension liabilities
4,500
687
5,187
Plan assets at fair value
(3,960)
Payroll tax
Net pension liabilities
-
(3,960)
76
97
173
616
784
1,399
Movement in the pension liabilities during the year
(USD 1,000)
2013
2012
Pension liabilities at January 1
5,360
6,866
212
171
Interest expence
Current service cost
Actuarial (gain)/losses
1,441
840
942
(3,197)
Benefits paid
(90)
(68)
Payroll tax
406
173
Currency effects
(747)
474
Pension liabilities at December 31
7,422
5,360
Movement in the pension assets during the year
(USD 1,000)
2013
2012
Plan assets at January 1
3,960
3,271
158
93
Interest income
Actuarial (gain)/loss
48
(234)
Contribution
434
739
Administrative expenses
(44)
(29)
Benefits paid
(86)
(68)
(337)
189
Currency effects
Plan assets at December 31
4,132
3,960
Movement in net pension liabilities during the year
(USD 1,000)
2013
2012
Pension liabilities at January 1
1,399
3,594
54
78
Interest expence
Current service cost
Actuarial (gain)/losses
Contribution
1,441
793
942
(2,963)
(434)
(739)
Administrative expenses
44
29
Benefits paid
(4)
0
Payroll tax
Currency effects
Pension liabilities at December 31
406
173
(410)
285
3,290
1,399
29
Notes to the accounts | Annual Report 2013
Future cash flow
The total expected premium to be paid for both contribution plans and defined benefit plan 2014 is NOK 4.7 million.
Maturity profile
2014-2015
Amount
180
Allocation
33 %
2016-2017
183
33 %
2018-2019
185
34 %
Total
548
100 %
The Group’s pension funds are managed by external asset manager. The funds are invested in different assets, with an allocation as
shown in the table:
Assets
Stocks
Obligations
Property
Estimated
return*
13.3-15.6 %
Allocation
7%
5.5-5.6 %
44 %
2.3 %
15 %
1.5-11.4 %
34 %
n.a.
100 %
(USD 1,000)
IT & communication costs
2013
1,748
2012
1,887
Office costs
1,934
1,911
Other administrative costs
5,271
4,378
Total
8,953
8,176
2013
2012
191
166
Alternative investments/ other
Total
* Estimated return is based on asset manager’s historical results
Note 8 – Other expenses
Other operating expenses
Auditor
(USD 1,000)
Fees to the auditor consists of the following services:
Statutory audit
Tax advice
Technical assistance of tax returns
5
3
97
70
Attestation services, IPO
166
0
Total
459
239
Auditor’s fees are stated excluding VAT
Note 9 – Income Tax
The Parent company Western Bulk ASA is resident in Norway,
where the corporate tax rate for 2013 is 28%, while some parts of
the Group are taxed in other jurisdictions and other tax regimes.
Tonnage tax:
Companies subject to tonnage tax regimes are exempt from
ordinary tax on their shipping income.
30
Some entities in the Group are subject to the Norwegian tonnage
tax regime and are therefore not applicable to income tax from
shipping operations. They are instead taxed based on the net
tonnage of the companies’ owned and leased vessels. Non-operational income such as financial income is subject to the ordinary
tax regimes in the country of jurisdiction. The tonnage tax is
classified as operating expense in the income statement.
Annual Report 2013 | Notes to the accounts
The major componenents of income tax expense/ (income) for the year are:
Consolidated income statement
(USD 1,000)
Current income tax:
2013
2012
Taxes payable
1,052
751
7
2
Adjustments in respect of current income tax of previous year
Deferred tax:
Relating to origination and reversal of temporary differences
(11)
Income tax expense/ (income) reported in the income statement
(1,078)
1,049
(325)
Reconciliation of actual tax cost against expected tax cost in accordance with the ordinary Norwegian income tax rate of 28%.
(USD 1,000)
Profit before tax
2013
6,338
2012
24,186
Calculated tax expense at 28 % tax rate
1,775
6,772
Tax effect from:
Tax effect of non-deductible expenses
(1,574)
Not recognized deferred tax assets ordinary tax scheme
845
(186)
Correction for previous years tax provisions
58
7
103
Other (foreign exchange rate conversion, different tax rates in other jurisdictions and tonnage tax regime)
1,028
(8,103)
Total tax expense/ (income)
1,049
(325)
Effective tax rate
16.5 %
-1.3 %
The effective tax rate will for the Group vary from period to period dependent on the Group’s tax exempt revenues from tonnage tax
regimes, USD to NOK currency transition for Norwegian tax purpose and not recognized deferred tax assets ordinary tax scheme.
Deferred tax relates to the following temporary differences:
(USD 1,000)
Fixed assets
Pensions
Current assets
2013
(406)
2012
(387)
(3,285)
(1,408)
62
Accruals and provisions
198
(2,030)
Gain/(loss) account for deferral
(4,625)
7,954
9,957
Tax loss carried forward
(19,299)
(17,968)
Total temporary differences
(17,005)
(14,232)
(4,591)
(3,985)
3,659
2,974
Net deferred tax liability / deferred tax assets (-) (27% in 2013 and 28% in 2012)
Deferred tax assets not recognised
Deferred tax liability in the balance sheet
Deferred tax asset in the balance sheet
The temporary differences related to fixed assets, current assets
and liabilities and most of the tax losses carry forward are
nominated in NOK and translated to balance date rate. The net
currency gain and losses are recognised on entities level due to
different functional currency than local currency.
Financial losses carry forward from the tonnage tax regime can
only be utilised against future financial profit within the tonnage
tax regime. Tax losses cannot be transferred between Group
companies under the tonnage tax regime and Group companies
1,230
1,152
(2,163)
(2,163)
subject to ordinary taxation. The deferred tax liability in the
balance sheet is related to the tonnage tax regime, and can
therefore not be netted off with the deferred tax asset from
ordinary taxation.
A deferred tax asset is recognised in the balance sheet to the
extent it is more likely than not that the tax asset will be utilised.
Deferred tax asset not recognised is USD 3.7 million as of
December 31, 2013 and USD 3.0 million as of December 31, 2012.
31
Notes to the accounts | Annual Report 2013
Note 10 – Financial income and financial expenses
Financial income
(USD 1,000)
2013
2012
Interest income
336
100
Gain foreign exchange
167
-
Total financial income
503
100
2013
2012
Financial expenses
(USD 1,000)
Interest expenses
Loss foreign exchange
(3,452)
-
(752)
(580)
Other financial expenses
(33)
(1,907)
Total financial expenses
(3,486)
(3,239)
Note 11 – Earnings per share
a) Basic
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average
number of ordinary shares in issue during the year excluding ordinary shares purchased by the Company and held as treasury shares.
The Company did not purchase any ordinary shares during the year.
(USD 1,000)
2013
2012
Profit attributable to equity holders of Parent
5,522
24,386
141,724,877
134,734,920
0.04
0.18
Weighted average number of ordinary shares in issue
Earnings per share - basic (USD)
b) Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion
of all dilutive potential ordinary shares. The Company has one category of dilutive ordinary shares: share options. 3,114,970 options were
issued to the senior management on 25 October 2013 in connection with the listing of the Company. A calculation is done to determine
the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company’s
shares) based on the monetary value of the subscription rights attached to outstanding options. The number of shares calculated as
above is compared with the number of shares that would have been issued assuming the exercise of the share options.
(USD 1,000)
2013
Profit attributable to equity holders of parent
5,612
Weighted average number of ordinary shares in issue
Adjustment for share options
Weighted average number of ordinary shares for diluted earnings per share
Earnings per share - diluted (USD)
32
2012
141,724,877
79,325
141,804,202
0.04
n.a.
Annual Report 2013 | Notes to the accounts
Note 12 – Subsidiaries, associates and other financial investments
2013
Western Bulk ASA has the following direct ownership
in subsidiaries as of 31.12.2013
Ownership
share/
voting share
Business
office
Currency
Share
capital
(1,000)
Western Bulk Shipholding AS
100.0 %
Oslo
NOK
230
Western Bulk Chartering AS
100.0 %
Oslo
NOK
200
KPE Holding AS
100.0 %
Oslo
NOK
100
82.4 %
Oslo
NOK
264
Ownership
share/
voting share
Business
office
Currency
Share
capital
(1,000)
Western Bulk Management AS
100.0 %
Oslo
NOK
750
Western Bulk Carriers AS
100.0 %
Oslo
NOK
100
KPE Holding KS 2)
Indirect ownership held by subsidiaries
of the Group as of 31.12.2013
Western Bulk Pte Ltd
100.0 %
Singapore
USD
37,500
100.0 %
Santiago
CLP
26,883
Western Bulk Carriers GmbH
100.0 %
Hamburg
EUR
26
Western Bulk Carriers (Seattle) Inc.
100.0 %
Seattle
USD
0
Western Bulk Carriers KS
100.0 %
Oslo
NOK
34,160
Western Bulk (Chile) Ltda
3)
Western Bulk Shipowning I AS
100.0 %
Oslo
NOK
350
51.0 %
Oslo
NOK
205
Western Bulk Shipowning III AS
100.0 %
Oslo
NOK
255
Western Bulk Shipowning IV AS
100.0 %
Oslo
NOK
235
Western Bulk Shipowning V AS
100.0 %
Oslo
NOK
200
Western Bulk Shipowning II AS
1)
Western Bulk Shipowning VI AS
100.0 %
Oslo
NOK
100
WBC I AS
100.0 %
Oslo
NOK
200
Registered
office
Currency
Share of
result
(1,000)
Western Alterna Partnership
20.0 % Marshall Islands
USD
(955)
Western Alterna GP LLC
20.0 % Marshall Islands
USD
(10)
The shares are pledged in favour of Nordea Bank Norge ASA.
An additional 10.0 % is owned indirectly through KPE Holding AS.
3)
99.9 % is owned by Western Bulk Pte Ltd and 0,1 % is owned by Western Bulk Chartering AS.
1)
2)
Western Bulk Carriers GmbH has not been consolidated due to immaterial values.
Investments in associated companies as of 31.12.2013
Ownership
share/
voting share
Reference to Note 18 for remaining capital expenditure commitments.
Investment in associates - balance sheet amount
Value of investment 01.01.2013
Share of profit/(loss)
Dividends received
Investments
Other adjustments
Carrying value of investment 31.12.2013
Aggregate financial information of associates according to owner share
Operating revenue
Profit/(loss)
Total assets
(USD 1,000)
9,940
(965)
0
240
0
9,215
(USD 1,000)
2,693
(965)
18,361
Equity
9,215
Liabilities
9,145
The accounting for associates has been according to the equity method.
33
Notes to the accounts | Annual Report 2013
2012
Ownership
share/
voting share
Business
office
Currency
Western Bulk Shipholding AS
100.0 %
Oslo
NOK
211
Western Bulk Chartering AS
100.0 %
Oslo
NOK
200
KPE Holding AS
100.0 %
Oslo
NOK
100
82.4 %
Oslo
NOK
11,003
Ownership
share/
voting share
Business
office
Currency
Share
capital
(1,000)
Western Bulk Management AS
100.0 %
Oslo
NOK
750
Western Bulk Carriers AS
100.0 %
Oslo
NOK
100
Western Bulk ASA has the following direct ownership
in subsidiaries as of 31.12.2012
KPE Holding KS 2)
Indirect ownership held by subsidiaries
of the Group as of 31.12.2012
Western Bulk Pte Ltd
Share
capital
(1,000)
100.0 %
Singapore
USD
37,500
100.0 %
Santiago
CLP
26,883
Western Bulk Carriers GmbH
100.0 %
Hamburg
EUR
26
Western Bulk Carriers (Seattle) Inc.
100.0 %
Seattle
USD
0
Western Bulk Carriers KS
100.0 %
Oslo
NOK
34,160
Western Bulk Shipowning I AS
100.0 %
Oslo
NOK
300
51.0 %
Oslo
NOK
205
100.0 %
Oslo
NOK
200
100
Western Bulk (Chile) Ltda
3)
Western Bulk Shipowning II AS 1)
Western Bulk Shipowning III AS
Western Bulk Shipowning IV AS
100.0 %
Oslo
NOK
Western Bulk Shipowning V AS
100.0 %
Oslo
NOK
200
Western Bulk Shipowning VI AS
100.0 %
Oslo
NOK
100
WBC I AS
100.0 %
Oslo
NOK
200
Registered
office
Currency
Share of
result
(1,000)
Western Alterna Partnership
20.0 % Marshall Islands
USD
(637)
Western Alterna GP LLC
20.0 % Marshall Islands
USD
(6)
The shares are pledged in favour of Nordea Bank Norge ASA.
An additional 10.0 % is owned indirectly through KPE Holding AS.
3)
99.9 % is owned by Western Bulk Pte Ltd and 0.1 % is owned by Western Bulk Chartering AS.
1)
2)
Western Bulk Carriers GmbH has not been consolidated due to immaterial values.
Investments in associated companies as of 31.12.2012
Ownership
share/
voting share
Reference to Note 18 for remaining capital expenditure commitments.
Investment in associates - balance sheet amount
Value of investment 01.01.2012
10,833
Share of profit/(loss)
(643)
Dividends received
(250)
Investments
Other adjustments
Carrying value of investment 31.12.2012
Aggregate financial information of associates according to owner share
Operating revenue
Profit/(loss)
Total assets
0
0
9,940
(USD 1,000)
2,929
(643)
19,905
Equity
9,940
Liabilities
9,965
The accounting for associates has been according to the equity method.
34
(USD 1,000)
Annual Report 2013 | Notes to the accounts
Note 13 – Property, plant and equipment
2013
(USD 1,000)
Grabs
Other
Vessels
Total
Acquisition cost as of 01.01
1,823
2,964
25,296
30,083
Additions during the year
0
130
417
547
Disposals during the year
0
(69)
Acquisition cost as of 31.12
1,823
3,026
Accumulated depreciation as of 01.01
0
(69)
25,713
30,561
1,823
2,088
2,788
6,699
Depreciation for the year
0
417
1,741
2,158
Disposals
0
(69)
Accumulated depreciation as of 31.12
Book value as of 31.12
Useful life
1,823
0
2,436
589
0
(69)
4,529
8,788
21,185
21,774
5 years
5 years
5 years
(USD 1,000)
Grabs
Other
Vessels
Total
Acquisition cost as of 01.01
1,823
2,263
25,296
29,382
Additions during the year
0
707
0
707
Disposals during the year
0
2012
(6)
Acquisition cost as of 31.12
1,823
2,964
Accumulated depreciation as of 01.01
0
(6)
25,296
30,083
1,817
1,729
684
4,230
Depreciation for the year
6
365
2,104
2,475
Disposals
0
Accumulated depreciation as of 31.12
Book value as of 31.12
Useful life
1,823
0
5 years
(6)
2,088
876
5 years
0
(6)
2,788
6,699
22,509
23,385
5 years
Other fixed assets are mainly related to office equipment
The Group operated an average of 153 vessels in 2013. Only one
expects to obtain from sale of the asset after the estimated
of these was owned by the Company and is accounted for as fixed
ownership period.
assets on the balance sheet. Three of the vessels were owned by
associates, see note 12. The rest of the vessels are leased-in from
Residual value of the vessels and estimated useful life is reviewed
third parties, and classified as operating leases, see note 18.
at least at the end of each financial year. Depreciation
The Group has identified three classes of property, plant and
equipment; vessels, grabs and other. Other fixed assets is mainly
related to office equipment.
Vessels are depreciated over an expected useful life of 5 years
from when the vessel is delivered as a newbuild, based on the
Group’s vessel strategy. Residual value is taken into consideration.
With exception of docking and periodic maintenance, no components of the vessel have a useful life of shorter than 5 years, and
thus no components are depreciated seperately. The cost of
dry-docking and periodic maintenance is considered a separate
component that is depreciated over the period until the next
dry-docking.
Residual value is based on the amount that the Group currently
Impairment
All vessels are reviewed for impairment indicators at the end of
each reporting period. Test for impairment is performed when
impairment indicators have been identified. Recoverable amount
is estimated and compared with carrying amount. Recoverable
amount is the higher of fair value less costs to sell and value in
use. An impairment loss is recognised if the recoverable amount of
the vessel exceeds the carrying amount. As of December 31, 2013 the broker values were lower than the
carrying amount. This was considered an impairment indicator and
the Group has performed impairment tests where value in use are
calculated for the wholly-owned vessel and the vessels partially
owned through associates. Impairment losses were not identified or
recognised for any of the vessels as of December 31, 2013. The same
result was obtained after similar testing as of December 31, 2012.
35
Notes to the accounts | Annual Report 2013
Key assumptions
Value in use is calculated per vessel, as each vessel generate cash
inflows which is independent of cash inflows from the other vessels
and therefore is considered as an independent cash generating unit.
Value in use is reflected through future cash flows from each vessel
and calculated discount rate.
The value in use-calculation is based on a discounted cash flow
model. The cash flows are derived from the rates estimated by a
“reversal of rates to the mean”-model. This model uses the current
rate as a starting point and assumes that rates are trending towards
a long-term equilibrium, due to the cyclical nature of dry bulk shipping
markets. The long-term equilibrium is set as an average of the last
20 years and 10 year forward rates. The current rate levels are
below the long-term equilibrium, and the mean-reversion factor
slowly increases the rate assumption over the next 10 years from
current level and up to the equilibrium level. Thereafter, an annual
increase of 2.5% is applied to estimate the future rate levels. The
projected rates are adjusted for any firm contracts for the vessel
within the period of estimated cash flows.
The discount rate applied in the value-in-use calculation is split in
two: the first 10 years of the estimated cash flow is discounted
with 4.5% discount rate. This discount rate reflects that the rate
assumption for the first 10 years is a risk-adjusted and conservative rate assumption. All subsequent years are discounted based
on a weighted average cost of capital (WACC) of 10%, reflecting
that the rates in this period is subject to an annual growth factor
assumed at 2.5%, and also factoring in the uncertainty in the
estimated terminal value of the vessel.
Note 14 – Bunkers and other inventories
Bunkers and other inventories consist of bunkers and lube oil on the Group’s vessels.
(USD 1,000)
Fuel
Diesel
Lubrication oil
Total
2013
2012
49,709
46,854
5,344
5,226
143
196
55,196
52,276
Note 15 – Non-current financial investments
As of December 31, 2013 the Group has investments in financial
assets of USD 0.2 million (USD 22.8 million as of December 31,
2012). The investments are measured at fair value in the balance
sheet. The investments are classified as non-current.
Note 16 – Cash
Cash and cash equivalents consist of:
(USD 1,000)
Cash at banks - unrestricted
Cash at banks - restricted
Total
As of 31.12.2013, USD 6.1 million of the restricted deposits was
tied to deposits in favor of clearing houses. USD 1.5 million was
pledged in favor of Nordea for guarantees issued on behalf of the
Group, USD 0.4 million was taxes withheld from employees and
USD 1.1 million was pledged to secure pension commitments.
2013
2012
109,894
59,810
9,118
5,506
119,011
65,316
Certain financial covenants related to debt (note 20), impose a
minimum limit to the unrestricted bank deposits for the Group. It is
a requirement that the consolidated unrestricted bank deposits,
including any undrawn available amount from credit facilities,
exceeds USD 20.0 million at all times to ensure compliance with
the relevant agreements and guarantees provided.
Note 17 – Financial Risk Management
Financial Risk
The Group’s activities expose it to financial risks such as, market
risks (including but not limited to, currency risk, freight rate and
bunker price risk), credit/counterpart risk and liquidity risk.
The Board of Directors is responsible for setting the objectives and
underlying principles of financial risk management for the Group.
The Board of Directors also establishes detailed policies such as
authority levels, oversight responsibilities, risk identification and
36
measurement, exposure limits and hedging strategies. The risk
management department identifies, evaluates and hedges
financial risks in close co-operation with the Group’s operating
units. The Group has invested considerable resources in establishing a risk control and monitoring system which quantifies the
Group’s market exposure on a daily basis. The Group actively uses
currency forwards and derivatives such as forward freight
agreements (FFA), bunker swaps and other financial instruments
to hedge its market exposure. Hedge accounting is not applied.
Annual Report 2013 | Notes to the accounts
Market Risk
Currency risk
The Group’s revenue and costs are denominated primarily in
United States Dollar (“USD”) which is the functional currency of
most entities within the Group.
Currency risk arises through ordinary business, future commercial
transactions, recognised assets and liabilities and when such have
been made against payment in a currency other than the functional
currency of the Group. The Group is mainly exposed to Euro (EUR)
and Norwegian Kroner (NOK). The Group may from time to time
(USD 1,000)
EUR
NOK
utilise currency forward contracts and currency option contracts
to reduce currency exposure. The Group’s currency exposure is based on cash and bank balances,
trade and other receivables, and trade and other payables. Financial
assets and financial liabilities denominated in the functional currency
are not included.
If the EUR and NOK rates against the USD had been stronger or
weaker by 5 % (2012: 5 %) at the balance sheet date with all other
variables, the effects on profit and loss before tax arising from the
net financial assets position would have been as follows:
2013
2012
Change if USD 5 % weaker
139
136
Change if USD 5 % stronger
(139)
(136)
Change if USD 5 % weaker
(117)
(127)
Change if USD 5 % stronger
117
127
Market Risk
Freight rate risk
Based on a change in freight rate of 10 % at 31.12.2013 and
31.12.2012, the Group’s profit and loss would have increased /
(decreased) by the amounts shown below, as a result of changes
in fair value of freight derivatives. This analysis assumed that all
other variables remained constant. The effect on an increase and
decrease is not symmetric due to use of options.
(USD 1,000)
2013
2012
Fair value changes on derivatives from increase in freight rate
3,469
14
Fair value changes on derivatives from decrease in freight rate
(3,370)
(5)
Market Risk
Bunker price risk
Due to the high fluctuation in oil prices, the Group uses bunker and
oil derivatives to reduce the impact of future changes in fuel prices
and the resulting cost of performing the Group’s long term cargo
commitments.
Based on a change in bunker prices of 10 % at 31.12.2013 and
31.12.2012, the Group’s profit and loss would have increased /
(decreased) by the amounts shown below, as a result of changes
in fair value of bunker swaps. This analysis assumed that all other
variables remained constant.
(USD 1,000)
2013
2012
Fair value changes on derivatives from increase in bunker price
9,470
7,594
Fair value changes on derivatives from decrease in bunker price
(9,470)
(7,283)
Credit/Counterparty risk
Credit risk refers to the ability and willingness of counterparts to
pay for services rendered and to stand by their future contractual
commitments with the Group. The Group has implemented thorough
procedures to limit the exposure to unreliable counterparts and the
Group avoids undue concentration of credit and counterpart exposure.
Prior to fixing any business with new customers or medium to longer
term business with existing customers, commercial departments
have to get approval from the Group’s credit risk team. Significant
exposures must be approved by the Groups credit committee. The
credit assessments are based on information from external credit
rating agencies, public information, the Group’s previous experience
with the counterpart and internal analysis. Country and political risk
also forms a part of the assessment. The Group actively seeks to
diversify its exposure to particular industries and/or jurisdictions.
Throughout the financial year, the Group has increased its
customer base, and so further diversified its credit exposure.
There is no class of financial assets that is past due and/or
impaired except for trade receivables.
37
Notes to the accounts | Annual Report 2013
The age analysis of trade receivables is as follows:
(USD 1,000)
2013
2012
Not past due
54,571
37,038
Past due < 3 months
11,481
10,204
Past due 3 to 6 months
2,135
814
Past due over 6 months
5,080
5,645
Impairment
(1,213)
Total trade receivables
(1,213)
72,053
52,488
Credit/Counterparty risk
Financial assets that are past due and/or impaired.
The carrying amount of trade receivables individually determined to be impaired and the movement in the related allowance for impairment are as follows:
(USD 1,000)
2013
2012
Past due over 6 months
1,213
1,213
(1,213)
(1,213)
Less: Allowance for impairment
Total
-
Beginning of financial year
-
1,213
900
Allowance utilised
-
(400)
Allowance made
-
713
1,213
1,213
End of financial year
Liquidity risk
Liquidity risk is the risk that the Group will be unable to fulfil its
financial obligations as they fall due.
The Group monitors its liquidity risk by maintaining a level of cash
and bank balances deemed adequate by management to finance
the Group’s operations and mitigate the effects of fluctuations in
cash flows.
Management monitors rolling forecasts of the Group’s liquidity
reserve and cash and bank balances on the basis of expected
cash flow. Reference can be made to note 16 for details on cash,
and note 20 for interest-bearing debt.
Nearly all of the Group’s derivatives are cleared through clearing-houses. The Group must deposit money into the clearing
account if the market value of the derivatives fall. However, the
Group will also receive money should the market value of the
derivatives rise.
The table below shows derivative and non-derivative liabilities of
the Group broken into relevant maturity groupings based on the
remaining period from balance sheet date to the contractual
maturity date.
2013
(USD 1,000)
Current
Less than
Between 1
1 year
and 2 years
Long-term
Between 3
More than
and 5 years
5 years
Non Derivatives
112,048
3,682
890
Interest-bearing debt
Trade and other payables
1,325
10,269
49,312
-
Total non derivatives
113,373
13,950
50,202
2,925
Derivatives
Total
38
2,925
-
-
294
-
113,373
13,950
50,496
2,925
Annual Report 2013 | Notes to the accounts
2012
Current
Less than
Between 1
1 year
and 2 years
(USD 1,000)
Long-term
Between 3
More than
and 5 years
5 years
Non Derivatives
Trade and other payables
119,456
7,426
764
Interest-bearing debt
1,356
1,325
10,269
-
Total non derivatives
120,812
8,751
11,033
1,025
Derivatives
Total
Capital Risk
The Group’s objectives when managing capital are to safeguard
the Group’s ability to continue as a going concern and to maintain
an optimal capital structure so as to maximise shareholder value.
In order to maintain or achieve an optimal capital structure, the
Group may return capital to shareholders or obtain borrowings.
The Group monitors capital based on the equity to total asset
ratio. The equity ratio should be above 25 %. In addition nominal
value of equity should be above USD 50 million.
For the WB Chartering segment, value at risk for the total portfolio of
physical and derivative contracts is monitored on an on-going basis.
Fair value measurements
The fair values of freight and bunker derivatives traded in active
markets are determined using actively quoted market prices at the
balance sheet date.
1,025
-
2,042
-
-
120,812
10,793
11,033
1,025
The fair value of currency forwards and currency options are
determined using actively quoted forward exchange rates at the
balance sheet date.
The fair values of current financial assets and liabilities carried at
amortised cost approximate their carrying amounts.
The long term liabilities have floating rate interest with a fixed
margin. The margin is considered not to have significantly
changed since drawing date, thus carrying amount is considered a
reasonable estimate of fair value.
The fair value of available for sale investments was estimated
using a level 3 valuation model. The fair value of some financial
derivatives was also estimated using a level 3 valuation model.
These assets and derivatives were acquired in 2012 and disposed
October 2013 in connection with the closing of the IPO, see note 22.
Reconciliation of fair value measurements of Level 3 financial instruments
Available-for-sale
investments
Financial
derivatives
Total
January 1, 2013
22,549
6,537
29,086
Purchased 2013
665
-
665
Fair value changes recognised directly in equity
-
118
118
Fair value changes recognised in profit and loss
2,860
Reversed available-for-sale reserve
1,177
-
1,177
(27,250)
-
(27,250)
(USD 1,000)
Disposed 2013
December 31, 2013
-
(6,654)
-
(3,795)
-
Note 18 – Leasing and other commitments
TC contracts - Group as lessee
The Group leases vessels in from external third party companies.
The lease agreements run up to 8 years, some with an option to
extend for additional 1+1+1 years and some also have a purchase
option. The leasing contracts do not substantially transfer all the
risk and rewards incidental to ownership. Hence, all leases are
characterised as operational. Vessels chartered in on time charter
for a period of time represents a commitment for paying hire.
For vessels chartered in on floating rates, an estimate has been
applied for the hire commitment.
Charter coverage: For 2014 approximately 21 vessels of a fleet of
41 vessels have employment with existing cargo contracts or have
been relet on time charter, while for the period 2015 and beyond,
approximately 7-9 vessels of a fleet of 31-35 vessels have firm
employment.
39
Notes to the accounts | Annual Report 2013
Nominal Hire Commitment (USD 1,000)
2014
171,354
2015
141,434
2016
161,387
2017
160,002
Beyond
479,155
Total
1,113,332
Vessel Days
14,985
11,312
12,758
12,419
36,650
88,124
Average Rate USD/Day
11,435
12,503
12,649
12,884
13,074
12,634
Vessel Equivalent/year
41
31
35
34
n.a.
n.a.
TC contracts - Group as a lessor
The Group has three of its vessels in the Shipholding segment
entered into long-term TC-contracts. The leases have remaining
terms of between one and eight years. These non-cancellable
leases have terms of renewal but no purchase options or
escalation clauses. Also a number of vessels in the Chartering
segment is entered into TC-contracts lasting more than 30 days as
of December 31, 2013. Also these non-cancellable leases have
terms of renewal but no purchase options or escalation clauses.
Future minimum rentals receivable under non-cancellable
operating leases are as follows: WB Chartering
< 30 days 1-3 months > 3 months
Nominal Hire Receivable (USD 1,000)
Vessel Days
Average Rate (USD/Day)
23,769
15,292
5,160
Total
44,222
1,837
1,191
524
3,552
12,942
12,844
9,839
12,451
< 1 year
1-3 years
> 3 years
Total
16,168
22,984
50,024
89,175
1,149
1,623
3,619
6,391
14,071
14,161
13,823
13,953
WB Shipholding
Nominal Hire Receivable (USD 1,000)
Vessel Days
Average Rate (USD/Day)
Capital Expenditure Commitments
The Group has a remaining commitment for capital to be provided
to the Western Alterna Partnership and Western Alterna GP LLC
(Note 12) amounting to approximately USD 2.1 million.
Leasing of offices
The Group leases office premises in Norway, USA, Singapore Chile
and Monaco and total annual lease commitments amounts to
approximately USD 1.6 million. The lease contracts expire in the
period October 2014 to February 2019.
Note 19 – Issued capital and reserves
Ordinary shares issued and fully paid
Number of ordinary shares
Par value (USD)
Share capital (USD)
2013
2012
2011
157,998,850
137,998,850
131,398,850
0.07
0.07
0.07
11,613,976
9,914,077
9,362,541
All shares have equal rights.
2013
In September of 2013, 124,198,965 new shares were issued as the
share was split 1:10, leaving the par value at NOK 0.50 per share.
The outstanding shares for previous years have been amended
according to the split to make the number of shares outstanding
comparable. In October 2013, the share capital was increased
by NOK 10 million by the issuance of 20,000,000 shares of
NOK 0.50 each.
2012
The share capital was increased by USD 551,536 in June 2012
by the issue of 660,000 ordinary shares of NOK 5 each (equal to
40
6,600,000 shares at NOK 0.50 when adjusted for the share split
in 2013).
Dividends and group contributions
The Group paid a total dividend of USD 35.5 million in 2013.
USD 7.7 of the total dividend amount was related to 1H-2013,
while the remaining USD 27.8 million was dividend related to
results in previous years.
The Board of Directors propose to pay a dividend for 2nd half
2013 of NOK 0.12 per share in 2014.
The Group did not pay any dividends or group contributions in 2012.
Annual Report 2013 | Notes to the accounts
20 largest shareholders as of 31.12.2013
Controlled by
Kistefos AS
Christen Sveaas (Chairman of the Board)
Number
of shares
Ownership
95,476,834
60.43 %
Klaveness Ship Investment AS
4,916,700
3.11 %
Ferd AS
4,000,000
2.53 %
Montague Place Custody Account
2,522,305
1.60 %
Bank of NY Nominee Account
2,360,906
1.49 %
Odin Maritim
2,083,400
1.32 %
SEB Nominee Account
1,978,450
1.25 %
Verdipapirfondet DNB
1,907,854
1.21 %
Barclays Capital Nominee Account
1,759,400
1.11 %
Morgan Stanley Nominee Account
1,578,091
1.00 %
Lisann AS
1,379,990
0.87 %
Morgan Stanley Nominee Account
Jens Ismar (CEO)
1,356,620
0.86 %
JP Morgan Chase/Handelsbanken Nominee Account
1,250,000
0.79 %
1,000,000
0.63 %
MP Pensjon PK
1,000,000
0.63 %
Pareto AS
1,000,000
0.63 %
Flu AS
1,000,000
0.63 %
Toluma Norden AS
Kistefos Investment AS
Christen Sveaas (Chairman of the Board)
1,000,000
0.63 %
Verdipapirfondet Handelsbanken
850,000
0.54 %
DNB Livsforsikring ASA
798,880
0.51 %
28,779,420
157,998,850
18.21 %
100.0 %
Other
Number of shares
Ultimate controlling company of the Group is Kistefos Holding AS. Ultimate controlling party is Christen Sveaas.
Shares and options held by board members and
senior management as per 31.12.2013
Christen Sveaas *
Chairman of the Board
Related party
Kistefos AS/Kistefos
Investment AS
Puregas AS
Number of
shares
96,476,834
Number of
options
-
Benedicte B. Agerup *
Member of the Board
12,500
-
Kristin Gjertsen
Member of the Board
4,166
-
Henning E. Jensen
Member of the Board
-
-
Rolf A. Wikborg
Member of the Board
-
-
Jens Ismar *
CEO
Lisann AS
1,379,990
1,779,990
Egil Husby *
CRO
Valletua AS
690,000
889,990
Håvard Furu *
CFO
Tryvert AS
345,000
444,990
*) Shares are owned through related parties.
Note 20 – Interest-bearing debt and guarantee commitments
The Group has two loan agreements, a NOK 300 million unsecured
bond loan (outstanding amount as of 31 December 2013 was NOK 300
million equal to USD 49.3 million) and a USD 15.9 million mortgage loan
(outstanding amount as of 31 December 2013 was USD 11.6 million).
Bond loan
The bond loan is listed on Nordic ABM and has no repayment until
maturity in April 2017. The loan is issued to Western Bulk ASA and the
Company has a right to call the entire bond loan at any time from April
2016 until April 2017, at 102.25% of the par value. As the Group’s base
currency is USD, the proceeds from the bond’s principal amount has
been exchanged to USD. The Group has hedged the currency risk associated with the bond loan’s principal amount by entering into FX collars
(Collar 1: NOK 150 million, floor 5.40 and ceiling 7.09; Collar 2: NOK 100
million, floor 5.75 and ceiling 6.93; Collar 3: NOK 50 million, floor 5.60
and ceiling 6.795). The collars give the Group a downside protection if
the NOK strengthens to a level where the USD/NOK falls below the
floor, while the Group keeps the upside potential of a currency gain if
the NOK weakens to a level where the USD/NOK increases to a level
above the ceiling. For any fluctuations between the floor and the ceiling,
the Group is exposed to the change in the exchange rate between the
USD and NOK.
Mortgage loan
The loan listed below is secured with a first priority mortgage in the
vessel, the vessel’s earnings, the vessel’s earnings accounts and the
shares in the borrower Western Bulk Shipowning II AS (owner of the
vessel Western Stavanger). The loan has been guaranteed by the
Parent company Western Bulk ASA.
41
Notes to the accounts | Annual Report 2013
Borrowings (USD 1,000)
Bond loan
Interest rate
Maturity
2013
3M NIBOR+ 6.75 %
April 2017
49,312
LIBOR+ 2.75 %
May 2015
11,594
60,906
Mortgage loan (Western Stavanger)
Total interest-bearing debt
2012
12,919
12,919
Installment profile
2014
1,325
2015 (incl. Balloon payment of 9,275)
10,269
2016
49,312
60,906
Book value of pledged asset
21,185
Guarantee commitments
As of December 31, 2013 bank guarantees have been issued in the
amount of USD 1.5 million on behalf of the Group for the benefit of
third parties.
Financial Covenants
In relation to the borrowing agreements and certain Parent
company guarantees provided by Western Bulk ASA, a set of
financial covenants applies for the Group. The Group is in
compliance with the covenants as of December 31, 2013.
Note 21 – Contingencies and provisions
The Group is involved in several disputes, including lawsuits, both
as defendant and plaintiff. Based upon the Group’s own views as
well as opinions received from lawyers, provisions based on best
estimate have been made in respect of the Group’s total exposure.
The actual outcomes of these disputes are unknown, and it could
take several years before the disputes and claims are finally settled.
Due to ongoing disputes, the Group chooses not to disclose details
of accruals (IAS 37.92). The total amount provided for where the
Group is defendant is USD 5.3 million as of December 31, 2013
compared to USD 5.2 million as of December 31, 2012. The
change is partly due to settlements paid and partly due to changes
in the provisions. There are no major additions to the provisions in
2013. None of the amounts are discounted, and hence no parts of
the expense/reversal are related to interest.
The largest single claim against the Group is for an amount of
about USD 14.35 million plus interest and costs. The litigation
relates to events dating back to 2004/2005 when a subsidiary,
seeking to enforce a judgment debt and further claims originally
estimated at about USD 6 million from a defaulting counterpart,
arrested a vessel believed to be beneficially owned by the debtor.
The original debtor has since been dissolved and the registered
owner of the vessel has claimed about USD 14.35 million plus
interests and costs after having obtained a judgment on liability
for wrongful arrest in Angola in 2006. That judgment is not
enforceable until such time as damages have been assessed.
The claim is now being litigated in Norway and a decision is
expected within Q4 2014. The outcome of the case is uncertain
and depends upon the court’s decision. Consequently there are
uncertainties related to the estimates for provisions which,
42
-
2017
Total interest-bearing debt
depending on the outcome of the case, could prove to be
insufficient to cover the potential liability.
No provision for onerous contracts was recognised at 2012 or
2013 year end.
Note 22 – Related party transactions
Transactions with related parties
2013
In January 2013 a short term loan of USD 24.0 million was granted
to Kistefos AS. The loan was set off in the dividend from Western
Bulk to Kistefos AS in April 2013. The terms of the loan agreement
were based on commercial terms. The interest rate was set at
Margin 1.5% + 3 months LIBOR.
In April 2013, a group contribution of USD 9.0 million (NOK 50 million)
was paid and received to/ from Kistefos AS. The net amount was
USD 0 (NOK 0).
In connection with the IPO in October 2013, Western Bulk ASA
excersised the put option to sell certain financial assets to Kistefos AS
at the pre-agreed sale price of USD 27.25 million. The assets were
purchased in 2012 from Kistefos AS, as described below. The
Company has in accordance with IFRS recognised the fair value of
the put options in the balance sheet since the acquisition in 2012,
with fair value change through the income statement in each
accounting period. Since the options were exercised prior to their
final maturity date in August 2015, an accounting loss occurred in
Q3-13. A gain on the assets being sold partly offset the accounting
loss on the put options. Consequently, the financial result of the
Group was negatively impacted (net amount) by USD 3.8 million in
2013 from the non-recurring transaction.
As of 31.12.2013 Western Bulk Shipholding had chartered in
3 vessels from the Western Alterna Partnership for various
lengths, in which Western Bulk has a 20 % stake in the joint
venture. During 2012, USD 13.2 million charter hire was paid to
the Western Alterna Partnership, whilst USD 0.5 million was
received in management fee and commission.
The board member Rolf Wikborg has entered into an agency
agreement with an external company that is currently providing
certain advisory services to Western Bulk. Mr Wiborg received in
Annual Report 2013 | Notes to the accounts
total USD 5,600 in agency fee from this company, based on a his
commission agreement, for the services rendered to Western Bulk
in 2013. The agency fee is equal to 20% of the fees that Western
Bulk paid for the advisory services.
With the exception of remuneration to board members as listed in
Note 6, there are no other material transactions with related
parties in 2013.
2012
Western Bulk ASA purchased financial assets for a total amount
of USD 26.1 million from Kistefos AS. Kistefos AS remained a
controlling shareholder for the relevant financial assets following
the transaction. The purchase price was based on a combination
of valuation methods such as net present value of estimated
future cash flows and asset appraisal reports. The values based
on estimated future cash flows, were subsequently confirmed by
an independent third party valuation report. Some of these
financial assets have uncalled capital commitments. The
transaction included a put-option for Western Bulk, whereby
Western Bulk can demand that Kistefos AS buys the financial
assets back at a pre-agreed price
Kistefos AS injected additional equity of USD 8 million to Western
Bulk ASA in exchange for 660,000 new shares issued in 2012.
As of 31.12.2012 Western Bulk Shipholding had chartered in
3 vessels from the Western Alterna Partnership for various
lengths, in which Western Bulk has a 20 % stake in the joint
venture. During 2012, USD 14.5 million charter hire was paid to
the Western Alterna Partnership, whilst USD 0.6 million was
received in management fee and commission.
With the exception of remuneration to board members as listed
in Note 6, there are no other material transactions with related
parties in 2012.
Note 23 – Subsequent events
There are no material events subsequent to the balance sheet date
of 31.12.2013.
From left: Johan Wigforss (trainee),
Jens Ismar (CEO), Egil Husby (CRO), Tonje B. Nilsen
(Marine Accountant, WB Shipholding)
43
Profit and Loss Statement – Parent Company | Annual Report 2013
Profit and Loss Statement
WESTERN BULK ASA (PARENT COMPANY)
(NOK 1,000)
Note
2013
2012
Operating revenues and expenses
Administration expenses
4, 7
(6,317)
(4,838)
(6,317)
(4,838)
7
(23,875)
(16,576)
57,756
165,771
5
10,476
Operating result
Financial revenues and expenses
Net interest income/(expense)
Income from subsidiaries
Gain/(loss) on sale of shares
Write-down of financial assets
(1,194)
Other financial income
0
Other financial expenses
(5,008)
Gain/(loss) on foreign exchange
3,270
(773)
(1,020)
Net financial items
47,149
142,614
Profit/(loss) before tax
40,832
137,776
Tax income/(expense)
Profit/(loss) for the year
44
8,994
0
(8,058)
3
2,813
43,645
(828)
136,948
Annual Report 2013 | Balance Sheet – Parent Company
Balance Sheet
WESTERN BULK ASA (PARENT COMPANY)
(NOK 1,000)
Note
2013
2012
ASSETS
Non current assets
Deferred tax asset
3
3,464
651
Investments in subsidiaries
5
437,563
299,445
Other financial investments
5, 7
0
145,094
441,027
445,191
103,526
131,494
8,373
10
Total non current assets
Current assets
Receivables from subsidiaries
6
Other short term receivables
Financial assets
5, 7
18
16
362,476
7,731
Total current assets
474,393
139,250
TOTAL ASSETS
915,421
584,441
Bank deposits
8
SHAREHOLDERS` EQUITY AND LIABILITIES
Equity
Paid-in capital
Share capital
Share premium
78,999
68,999
289,616
91,004
Other paid-in capital
7,713
7,169
Total paid-in capital
376,328
167,172
Retained earnings
Other equity
103,830
288,023
Total earned equity
103,830
288,023
2
480,158
455,196
Interest-bearing debt
8
300,000
0
Debt to subsidiaries
6
0
55,832
0
174
6
110,761
73,065
24,502
175
Total liabilities
435,263
129,245
TOTAL SHAREHOLDERS` EQUITY AND LIABILITIES
915,421
584,441
Total shareholders` equity
Liabilities
Long term liabilities
Short term liabilities
Bank overdraft
Debt to subsidiaries
Other short term liabilities
Oslo, February 27, 2014 The Board of Directors Western Bulk ASA
Christen Sveaas
Henning E. Jensen
Rolf A. Wikborg
Benedicte Bakke Agerup
Jens Ismar
Chairman of the Board
Kristin Gjertsen
CEO
45
Cash Flow Statement – Parent Company | Annual Report 2013
Cash Flow Statement
WESTERN BULK ASA (PARENT COMPANY)
(NOK 1,000)
2013
2012
40,832
137,776
CASH FLOW FROM OPERATIONS
Profit/(loss) before tax
(Gain)/loss sale of shares
Write down / adjusted value of financial assets
Changes in current receivables and current liabilities
Net cash flow from/(to) operating activities
(10,476)
0
(2)
4,906
(55,454)
(A)
(25,101)
(160)
142,521
CASH FLOW FROM INVESTMENTS
Investments in financial assets
0
Investments in subsidiaries
(27,359)
Sale of financial assets
Net cash flow from investments
155,570
(B)
(150,000)
(19,072)
0
128,211
(169,072)
Changes in interest-bearing short term and long term debt
299,826
(108,378)
Loan to/from subsidiaries
(47,924)
(103,266)
CASH FLOW FROM FINANCING ACTIVITIES
Dividend paid
(208,878)
Share capital increase
0
47,850
Net cash flow from financing activities
(C)
251,635
(163,794)
Net change in liquidity during the year
(A+B+C)
354,746
(190,345)
Liquid assets as of 1.1.
Liquid assets as of 31.12.
46
208,612
7,731
198,075
362,476
7,731
Annual Report 2013 | Notes to the accounts – Parent Company
Notes to the accounts
WESTERN BULK ASA (PARENT COMPANY)
Note 1 - Accounting Principles
The accounts have been prepared in accordance with the Accounting
Act of 1998 and generally accepted accounting principles in Norway.
The main accounting principles are described below. Unless otherwise
stated, all figures specified in the notes are quoted in whole NOK 1,000.
The annual accounts have been prepared on a going concern basis.
Reporting currency and functional currency
The Company has most of its activity related to USD and the USD is
therefore the functional currency, while the presentation currency for the
financial statement of the company accounts is Norwegian kroner (NOK).
Classification of assets and liabilities
Current assets and current liabilities include items that fall due within
one year as well as items associated with the business flows. Other
items are defined as fixed assets/long term liabilities.
Revenue recognition
Dividend/group contributions are accounted for when such dividend/
group contribution is received. However, when Company has
controlling interest dividend/group contribution is accounted for when
provisions are made in the distributing company.
Use of estimates
In accordance with generally accepted accounting principles, the
Company’s management must make estimates and assumptions that
influence the value of assets and liabilities in the balance sheet and the
amount of revenues and expenses included in the accounts during the
accounting period. The actual figures may vary from these estimates. When preparing the accounts, best estimates based on information
available at the time the accounts are prepared, are used.
Investments in subsidiaries
The cost method is used to account for investments in subsidiaries.
The investment is valued as cost of acquiring shares in the subsidiary,
providing that write down is not required. Write down to fair value will
be carried out if the reduction in value is caused by circumstances
which may not be regarded as incidental, and deemed necessary by
generally accepted accounting principles. Write downs are reversed
when the cause of the initial write down are no longer present.
Financial investments
Financial investments classified as current assets are recorded at the
lower of cost price or market value, unless being stock listed financial
instruments that are traded regularly in a liquid market. Such
investments are recorded at fair value.
Share-based payments
Share-based payments are equity-settled share options granted to
employees, for which an option pricing model is used to estimate the
fair value at grant date. That fair value is accounted for on a
­ traight-line basis as investments in subsidiaries over the period that
s
the employee (employed in a subsidiary) becomes unconditionally
entitled to the options (vesting period), with a corresponding increase
in equity. The social security contribution payable in connection with
the exercise of the share options is accrued on a straight-line basis as
short term liabilities, based on the intrinsic value of the share options
at the end of each accounting period, with corresponding increase in
investments in subsidiaries.
The number of such options is adjusted annually to reflect best
estimates of those expected to vest (ignoring purely marketbased
conditions) with consequent change in investments in subsidiaries.
Equity is also increased by the proceeds received, as and when
employees choose to exercise their options.
If the Company modifies the terms and conditions on which the equity
instruments were granted, as a minimum, the services received
measured at the grant date fair value of the equity instruments granted
(unless those equity instruments do not vest because of failure to
satisfy a vesting condition other than a market condition) are
accounted for as investments in subsidiaries.
Cancellations of grants of equity instruments during the vesting period
(other than a grant cancelled by forfeiture when the vesting conditions
are not satisfied) are accounted for as an acceleration of vesting, therefore
the unrecognised remaining amount is recognised immediately against
investments in subsidiaries.
Taxes
The tax expense in the profit and loss accounts includes both taxes
payable for the period and changes in deferred taxes. The change in
deferred tax reflects changes in future tax liabilities and assets as a result
of timing differences between the tax and the accounts. Deferred tax is
the tax that relates to the accumulated result, but is paid in a subsequent
period. Deferred tax/deferred tax assets have been calculated on net
positive temporary differences between accounting and tax-based balance
sheet values and which are reversed within a reasonable period of time
together with the deferred tax asset related to tax losses carried forward.
Cash flow statements
The cash flow statements are based on the indirect method. Shares
are considered to have a high price risk and are not classified as cash
equivalents. Changes in accounting principles, estimates and correction of errors
Changes in accounting estimates are recognized in the profit and loss
statement when they occur. If immaterial errors from previous accounting
periods are found, these are recognized in the profit and loss statement in
the current period. If material errors in previous periods are found, these
are adjusted in the equity and the financials for the relevant historic
periods are restated. Changes in accounting principles are implemented
with retrospective effect, being recognized in the equity and historical
periods are restated.
There are no material changes in the accounting principles for the
periods presented.
Note 2 – Equity
(NOK 1,000)
Share
capital
Share
premium
Other paid-in
capital
Other
equity
Total
Equity as of 01.01.2013
68,999
91,004
7,169
288,023
455,196
Share capital increase
10,000
227,495
Share issue expenses
237,495
(28,883)
(28,883)
Dividend
Proposed dividend
Share options
Profit/(loss) for the year
Equity as of 31.12.2013
(208,878)
(208,878)
(18,960)
(18,960)
544
78,999
289,616
7,713
544
43,645
103,830
43,645
480,158
See Note 19 in the consolidated Group accounts for an overview of shares and shareholders.
47
Notes to the accounts – Parent Company | Annual Report 2013
Note 3 – Taxes
Deferred taxes are calculated on the basis of the temporary difference between assets booked and tax-related assets at the end of the
accounting year.
(NOK 1,000)
2013
2012
Taxes payable
0
0
Under provision of taxes payable for previous years
0
0
The tax expense for the year consists of:
Changes in deferred taxes
(2,813)
828
Total tax expense/(tax income)
(2,813)
828
Deferred taxes
Temporary differences linked to shares in associated companies
0
0
Tax loss carried forward
(66,147)
(2,325)
Total temporary differences
(66,147)
(2,325)
Total temporary differences used as basis for deferred tax calculation
(66,147)
(2,325)
Estimated deferred taxes/(tax assets)
(17,860)
(651)
Deferred tax assets not recognised
14,395
Recorded deferred taxes/(tax assets)
(3,464)
0
(651)
Taxes
Pre-tax profit/(loss)
Permanent differences
Tax-related result from participating companies
Non taxable dividends from subsidiaries
Group contributions received
40,832
137,776
0
0
(3,930)
0
793
(115,000)
(57,756)
(50,494)
7,756
16,494
Write-downs/(reversals)
(34,114)
8,106
Tax result for the year
(47,213)
(2,325)
Group contributions subject to tax
Group contribution
0
0
Tax payable 28%
0
0
40,832
137,776
Reconciliation of tax expenses
Pre-tax profit/(loss)
- Changes in estimates prior years
(16,609)
6,074
- Write-downs/(reversals)
2,101
8,106
- Gain/(loss) on financial instruments
(6,424)
- Tax free dividends and group contributions
- Permanent differences
Basis for tax expense
Calculated tax expense (28%)
Changes in tax rate on deferred tax/(tax assets) from 28% to 27%
Inclusion of non-recorded tax benefits from previous years*
Total tax expense/(tax income) recognized
(53,930)
0
(149,000)
(908)
0
(34,939)
2,956
(9,783)
828
373
6,597
(2,813)
0
0
828
* Deductable IPO expenses recognized to equity amounts to NOK 28,883,224. The tax effect of these costs, NOK 7,798,470 (at a 27% tax
rate), are therefore not included in the tax expense.
48
Annual Report 2013 | Notes to the accounts – Parent Company
Note 4 - Remuneration to the CEO, members of the Board of Directors, and Auditor
See Note 6 in the consolidated Group accounts.
Auditor
Fees to the auditor consists of the following services:
(NOK 1,000)
Statutory audit
Review engagement services
Technical assistance of tax returns
2013
2012
238
231
88
0
90
117
Attestation services, IPO
1,042
0
Total
1,458
348
Ownership/
Voting share
100.0 %
Book value
31.12.2013
192,786
Western Bulk Chartering AS
100.0 %
244,777
KPE Holding AS
100.0 %
0
Auditor’s fees are stated excluding VAT.
Note 5 - Shares in subsidiaries and other companies
(NOK 1,000)
Subsidiaries
Western Bulk Shipholding AS
KPE Holding KS
82.4 %
1)
0
437,563
1)
An additional 10% is owned indirectly through KPE Holding AS
KPE Holding AS and KPE Holding KS are dormant companies which are in the process of being closed down.
Other financial investments as of 31.12.2013
In connection with the IPO in October 2013, Western Bulk ASA excersised the put option to sell certain financial assets to Kistefos AS at
the pre-agreed sale price of USD 27.25 million. The assets were purchased in 2012 from Kistefos AS and a gain of NOK 10,476,136 has
been recognized in the accounts.
Note 6 - Intra-Group balances
At the end of the year, the Company had the following amounts outstanding from Group companies:
(NOK 1,000)
Company
Relationship
31.12.2013
Western Bulk Management AS
Subsidiary
7,102
14,288
Western Bulk Carriers AS
Subsidiary
50,000
59,168
WBC I AS
Subsidiary
Western Bulk Shipholding AS
Subsidiary
(24,437)
Subsidiary
(85,000)
Western Bulk Chartering AS
Cash pool 1)
Net receivables/(liabilities) from Group companies
Subsidiaries
0
31.12.2012
1,488
2,820
0
45,101
(75,167)
(7,234)
2,597
The amounts presented are net receivables/liabilities per counterpart, while balance sheet presents gross amounts.
1)
Western Bulk ASA and subsidiaries entered into a cash pool structure in 2010 where Western Bulk ASA is the Group
Account Holder. As per 31.12.2013, the Company had a net asset due from the subsidiaries of NOK 45,101,315.
49
Notes to the accounts – Parent Company | Annual Report 2013
Note 7 - Transactions with related parties
See Note 22 in the consolidated Group accounts for
transactions with the main shareholder Kistefos AS.
Western Bulk ASA has following intercompany transactions with subsidiaries, directly or indirectly owned:
The subsidiary Western Bulk Management AS performs
management services for Western Bulk ASA and
receives a fee for the services based on arm’s length
terms. Management fee for 2013 was NOK 3,631,701.
Loans to and from subsidiaries are subject to interest
charges based on arm’s length terms. Intercompany
interest income in 2013 was NOK 17,939,900 and
intercompany interest expense was NOK 24,573,820.
Note 8 - Guarantees and interest-bearing
debt
See Note 20 in the consolidated Group accounts for
guarantees commitments and details about the
Company’s bond loan.
Bond loan
In April, Western Bulk ASA issued a NOK 300 million
unsecured bond loan with four years duration and no
amortisation until maturity. The loan was issued for
general corporate use and replaced a bank credit facility.
Note 9 - Subsequent events
There are no material events subsequent to the balance
sheet date of 31.12.2013.
MV Western Texas is partly
owned by WB Shipholding.
50
Annual Report 2013 Corporate Governance Report
Corporate Governance Report
Western Bulk ASA ­(“Western Bulk” or the “­ Company”) is committed to comply
with n
­ ational and international legi­slation and ­regulations as well as our own
high standards.
As a listed company on Oslo Stock
Exchange, a regulated market,
Western Bulk is subject to Oslo
Stock Exchange’s “Continuing
obligations of stock exchange
listed companies” (the “Continuing
Obligations”). In accordance with
the Continuing Obligations section
7 “Corporate Governance Report”
the Company is required to provide
in the annual report a report on its
compliance with the Norwegian
Code of Practice for Corporate
Governance (the “Code”).
We have adopted and implemented
a corporate governance regime
which, in all material respects,
complies with the Code referred
to in the Continuing Obligations
section 7. The Code is published on
the website of the Norwegian Corporate Governance Board (“NUES”)
at www.nues.no, and the Continuing Obligations are published on
Oslo Stock Exchange’s web site at
www.oslobors.no.
The Board of Directors of Western
Bulk (the “Board”) has prepared the
following report on the Company’s
compliance with the Code and the
Continuing Obligations section 7.
1. Implementation and reporting
on corporate governance
Western Bulk regards corporate
governance as a matter of great
importance, as it deals with the
relations between society, the
shareholders, the Board and the
executive management of the
Company.
Compliance with the Code will
strengthen confidence in the
Company and contribute to value
creation over time. A clear division
of roles has been established
between shareholders, members
of the Board and executives in line
with applicable legislation and the
Code. The Board of Western Bulk has
the overall responsibility for ensuring
that the Company has sound
principles for corporate governance.
Ethical guidelines and other policy
documents have been formulated
in accordance with the Company’s
values. The Company’s core values
are trustworthiness and integrity, and
these permeate the whole business.
The Company’s code of conduct for
business ethics and corporate social
responsibility is available on the
website of the Company.
2. The business
Western Bulk’s business is defined
in the Company’s articles of
association. These are available
on the Company’s website at
www.westernbulk.com, where
also further information about
the Company, the business model
and reports to the shareholders
can be found. Within the framework established by the articles,
the Board adopts the Company’s
strategy and targets. The business
scope clause in article 3 specifies:
“The Company’s objective is to
own, lease and operate vessels,
chartering and operator activities,
preparation of and participation in
financial transactions and related
activities, including participation in
companies with similar business.”
Through strategy processes, the
Board considers whether the
goals and guidelines derived from
the strategies are unambiguous,
adequate, well operationalised and
comprehensible to the employees.
3.Equity and dividends
Western Bulk will maintain equity
at a level which is acceptable in
relation to its business purpose,
strategy and risk profile. The
Group’s equity was USD 111.8
million at 31 December 2013, equal
to a book equity ratio of 38%.
Dividend
Western Bulk’s aim is to manage
the Group’s resources in such a
way that shareholders achieve a
return in the form of dividend and
building share value which is competitive with comparable investments. The Company’s long-term
goal which has been established by
the Board is to distribute a regular
dividend on a semi-annual basis of
75%-100% of its adjusted net profit.
Nevertheless, it will be important to
secure good financial flexibility for
the Company, and this consideration could imply that the Company from time to time may deviate
from the dividend policy. The Board
will propose to the annual general
meeting to pay a dividend of NOK
0.12 per share for the second half
result in 2013.
Good corporate
governance is
about ensuring
that companies
are managed as
efficiently as
possible in the
interests of the
shareholders.
2.6
million
tonnes
Clinker
In 2013 Western Bulk carried
2.6 million tonnes of clinker.
If processed into cement,
this equals to approximately
111,000 bags (94 lbs per
bag of cement).
Authorizations to
the Board of Directors
At the extraordinary general meeting
of the Company held 28 September
2013, the Board was granted an
authorisation to increase the share
capital of the Company up to NOK
22,500,000 through issuance of new
shares in connection with the initial
public offering (the “IPO”) completed
in October 2013. The Board was
further authorised to increase the
share capital of the Company up to
NOK 2,500,000 through issuance of
new shares in connection with a new
options program for senior executive
management. Both authorisations
will as recommended by the Code
expire in connection with the annual
general meeting in 2014. The Board
has proposed in accordance with the
Code that the authorisation to issue
new shares under the options
program for the senior executive
51
Corporate Governance Report | Annual Report 2013
As of 31.12.2013
Western Bulk ASA
had more than
1250 shareholders. Reference is
made to the notes
in the annual
report for an
overview of the
20 largest
shareholders.
management is renewed for the
next year and extended to also cover
options for other employees than
the senior management, and if
approved by the shareholders, this
authorisation will then expire in
connection with the annual general
meeting in 2015, however no later
than 30 June 2015. Upon completion
of the IPO a total of 20,000,000 new
shares were issued, increasing the
share capital with NOK 10,000,000.
No shares have so far been issued
under the options program.
The authorisations granted in
connection with the extraordinary
general meeting in 2013 were
restricted to the defined purposes
as described above and each
mandate was considered separately by the meeting. Both authorisations were limited in time to no later
than the date of the next annual
general meeting. As per the date
of this Report, the Board has not
been granted any authorisation to
purchase the Company’s own shares,
however the Board will propose to
the general meeting that the Board
is granted an authorization to acquire
own shares for general corporate
purposes of up to 10% of the total
amount of issued shares. Treasury
shares may be used in connection
with the option program for the
members of the senior executive
management and other employees
and for other purposes. The Board
will also propose to the general
meeting that the Board is granted
an authorisation to increase the
share capital of the Company with
up to NOK 15,000,000 through
issuance of new shares (in addition
to the authorisation related to new
shares issue for the option program).
This authorisation will replace the
authorisation which was granted by
the extraordinary general meeting
in connection with the IPO. The
authorisations for purchase of own
shares and issuance of new shares
under the Company’s option program
will, if approved by the general
meeting, in accordance with its
proposed terms and the Code expire
in connection with the annual general
meeting in 2015, however no later
than 30 June 2015.
52
The authorisations for the
buy-back of own shares and for
capital increase are, in order to
provide the desired flexibility for
the Board of Directors to pursue
business opportunities, general in
its description of purposes whereby
such authorisations may be
employed. The Code recommends
that authorisations of this nature
should be restricted to defined
purposes. The stated general
purpose for the authorisations is
thus deviating from the recommendation of the Code on this point.
The Board is however of the view
that the benefits of flexibility with
regards to issuing new shares and
purchasing own shares are important
for the Company to ensure that it
can fulfill its obligations under the
option program and utilize business
opportunities which may arise, and
as such support the further
development of the Company. In
addition, the number of shares to
be issued or purchased under the
proposed authorisations are
limited to a certain number of
shares (new shares that potentially
can be issued amount to approximately 22% of existing shares,
while shares that potentially can be
acquired amount to 10% of existing
shares) and limited in time.
4.Equal treatment of shareholders and transactions with
related parties
Equal treatment of shareholders
Western Bulk has one class of
shares only and all the shares have
equal voting rights. Emphasis is
given in the work of the Board and
the executive management to treating all shareholders equally and to
giving them the same opportunities
to exercise influence. The Company’s articles of association impose
no restrictions on voting rights.
In the event of an increase in share
capital, existing shareholders
will have a pre-emptive right to
subscribe unless special considerations in the common interest of
the Company and its shareholders
justify deviating from such rights.
If the Board resolves to carry out
an increase in the share capital
and waive the pre-emption rights of
existing shareholders on the basis
of a mandate granted to the Board,
a justification will be published in
a stock exchange announcement
in connection with the increase in
share capital.
Currently the Company does not
hold any treasury shares. In the
event that the Company in the future should carry out transactions
in its own shares, the Company
intends to carry out such transactions either through the stock
exchange or at prevailing stock exchange prices if carried out in any
other way. To the extent that there
is limited liquidity in the Company’s
shares, the Company will further
consider other ways to ensure
equal treatment of shareholders.
Transactions with related parties
To protect the Company’s reputation, Western Bulk is concerned
to maintain an open and cautious
approach to investments on terms
which could be perceived as an
undesirably close transaction or
relationship between the Company
and a shareholder, a shareholder’s
parent company, a member of the
Board, a senior executive, or related
parties of these. This is outlined
in the instructions for the Board.
Under these instructions, each
member of the Board is required to
assess at all times whether conditions exist which could objectively
weaken general confidence in their
impartiality or which could give rise
to conflicts of interest.
Where transactions take place with
related parties, they shall be
conducted on market terms. The
Board has established guidelines to
ensure that any member of the Board
or executive personnel report to the
Board if they have a material interest,
directly or indirectly, in a contract
entered into by the Company. In the
event of any non- immaterial
transactions between the Company
and related parties, the Board shall
obtain an independent third party
financial evaluation of the transaction, otherwise the transaction in
question shall be resolved by the
general meeting of the Company in
accordance with the provisions of the
Annual Report 2013 | Corporate Governance Report
Norwegian Public Limited Liability
Companies Act. Independent
valuations will also be obtained in
respect of any such non immaterial
transactions between companies
in the Western Bulk Group where
any of the companies involved
have minority shareholders,
otherwise the transaction in
question shall be resolved by the
general meeting of such company
in accordance with the provisions
of the Norwegian Private Limited
Liability Companies Act.
Transactions with related parties
are reported in the Company’s
­annual and interim financial reports.
Principal shareholder
Kistefos AS is the principal shareholder in Western Bulk, currently
holding approximately 60 % of the
shares. The Board considers it
positive to have an active owner
which emphasizes development
and value creation in the Western
Bulk Group, and believes that
this benefits all the shareholders
through long-term and purposeful
decisions. All information which
might be acquired by representatives from Kistefos in that respect
will be handled in accordance
with applicable legislation and
guidelines governing listed companies, in order to comply with the
requirement for equal treatment of
the shareholders.
5. Freely negotiable shares
No restrictions are placed on the
negotiability of shares in Western
Bulk by its articles of association.
6. General meetings
Shareholders exercise the highest
authority in Western Bulk through
the general meeting. The Board
makes provision to ensure that
the general meeting is an effective
forum for the shareholders and
members of the Board. The chairman and the chief executive officer
(“CEO”) of Western Bulk will attend
the general meeting, and the Board
will take steps to ensure that other
members of the Board, the Nomination Committee and the auditor are
present at the general meeting.
The Company makes provision for
the largest possible number of
shareholders to participate in the
general meeting. The notice of
meetings is sent to all shareholders with known address by post
and is made available on the
Company’s website 21 days before
the general meeting at the latest. If
documents related to matters that
shall be dealt with by the general
meeting are made available for the
shareholders on the Company’s
webpage, the articles of association of the Company states that the
general requirements in the
Norwegian Public Limited Liability
Companies Act for all documents
to be sent to all shareholders do
not apply. This includes documents
that according to law shall be
included in or attached to the
summons for a general meeting.
Detailed supporting documentation
relating to items on the agenda,
including the Nomination Committee’s recommendations, are posted
to the Company’s website 21 days
before the general meeting, or as
soon as completed if not yet
completed at that date. A shareholder
can nevertheless request that
supporting documentation for the
general meeting is sent to them by
post. The supporting documentation
must contain all the details required
by the shareholders to form a view
of every item on the agenda.
Shareholders who wish to attend
the general meeting must give
notice of this by the specified
deadline, which will be set as
close to the date of the meeting as
possible. Shareholders who cannot
attend in person are encouraged to
vote by proxy. The Company will
nominate a person who will be
available to vote on behalf of
shareholders as their proxy.
Provision is made for the shareholder to specify separate voting
instructions in their proxy for every
item on the agenda and for each
of the candidates nominated for
election. All information on the
appointment of a proxy and the
appropriate forms will be published
on the Company’s website in
connection with the publication of
the notice for the general meeting.
The general meeting elects its
chairman. The meeting is by
statutory law opened by the
chairman of the Board, who also
makes arrangements for the
election of a chairman for the
meeting. The annual general
meeting shall by statutory law
adopt the annual financial
statements and the annual
report, and consider the Board’s
declaration on the determination
of executive pay and other remu­
neration.
In accordance with the articles
of association of the Company,
the annual general meeting shall
elect the members of the Nomination Committee and its chair. In
addition, it considers such other
matters as are assigned to the
general meeting by statutory law
or the articles of association. The
Board and the person chairing
the meeting will make appropriate arrangements for the general
meeting to vote separately on each
candidate nominated for election
to the Company’s corporate bodies.
The minutes of the general meeting
are published and made available
on the Company’s website as soon
as practical after the meeting has
been held.
5.8
million
nautical
miles
Fleet distance
travelled
In 2013 Western Bulk’s
cargo carrying voyages
travelled 5.8 million nautical
miles, or the equivalent
of 236 times round the
­circumference of the earth
7. Nomination Committee
The articles of association specify that the Company will have a
Nomination Committee. Guidelines
for the Nomination Committee are
stipulated by the general meeting.
Pursuant to the Nomination
Committee Charter, the Nomination Committee will have two
members. Its composition must
be independent of the Company’s
Board and executive management,
and must act in the interests of the
shareholders in general. Members
of the Nomination Committee
are appointed by the general
meeting, and shall serve for such
term(s) as the general meeting
determines. The general meeting
shall designate the chairman for
the Nomination Committee, and
also determine the remuneration
of the Committee’s members.
The Nomination Committee itself
53
Corporate Governance Report | Annual Report 2013
Board Meeting
Attendance: Since
the listing of the
­Company’s shares
in October and until
31 December 2013,
three board meetings
have been held.
All board members
were present at the
meetings, except for
Mr Christen Sveaas
and Mr Henning E.
Jensen who have
been absent in one
meeting each.
recommends members of the
Committee. As per the date of
this Report, the members of the
Nomination Committee are Klaus
P. Tollefsen (chairman) and Anne
Birgitte Fossum (member).
The Nomination Committee is due
for election at the annual general
meeting for 2015.
The duties of the Nomination Committee are to identify, evaluate and
propose candidates for election
as members of the Board and to
recommend Board Members’ fees.
The Committee shall also advise
the Board with respect to Board
composition, procedures and committees, and oversee the evaluation
and review the performance of the
Board.
The members of the Board are
elected on the basis of a recommendation, with justifications, from
the Nomination Committee. The
composition of the Board shall
ensure that the Board can attend to
the common interests of all shareholders and meets the Company’s
need for expertise, capacity and
diversity. As the Board currently
consists of five members, applicable statutory law requires that both
genders are represented by at least
two. The chairman of the Board
shall be elected by the general
meeting. Board Members’ fees are
determined by the general meeting
on the basis of a recommendation
from the Nomination Committee.
The Nomination Committee will
account for its work and present its
recommendations, with justifications, to the general meeting. The
recommendations must encompass relevant information about
the candidates and an assessment
of their independence from the
Company’s executive management
and Board. The Committee should
also entrench its recommendations
with the Company’s largest
share­holders. The Committee’s
recommendations, with justifications, are made available 21 days
before the general meeting takes
place, or as soon as completed if
not yet completed at that date.
Recommendations from the
Committee must meet the require­
ments for the composition of the
Board which derive at any given
time from applicable regulations
and statutory law.
Further information on the background and experience of the members of the Board can be found on
the Company’s website. The annual
report will also provide information
on the Board Members’ record of
attendance at Board meetings.
8. Board of directors:
composition
and independence
Members of the Board are generally encouraged to own shares in the
Company.
In accordance with Norwegian law,
the Board is responsible for administering the Company’s affairs and
for ensuring that the Company’s
operations are organised in a satisfactory manner.
Pursuant to article 5 of the
Company’s articles of association,
the Board shall consist of five to
54
seven members. The members of the
Board are elected by the general
meeting of shareholders. The
members of the Board are elected
for a term of 2 years. Board members
may be re-elected. In the event of
equal votes cast, the chairman of the
Board shall have the casting vote.
The majority of the members of the
Board shall be independent of
executive management and
significant business contacts.
Members of the executive manage­
ment shall not serve as members
of the Board. At least two of the
members of the Board must be
independent of the Company’s
main shareholders (defined to
exceeding 10 % shareholding).
Independence of the Board
The composition of the Board is
intended to ensure that it can act
independently of special interests.
It must also function effectively
as a collegiate body to the benefit
of the shareholders in general. No
shareholder-elected member of the
Board is involved in the executive
management. The chairman of
the Board, Christen Sveaas, is the
founder, sole owner and executive
chairman of Kistefos AS, and member of the Board Henning E. Jensen
is the former CEO of Kistefos AS.
The other shareholder-elected
members of the Board are independent of Western Bulk’s executive
management, significant business
relations and major shareholders.
Information on the shareholdings
of members of the Board can
be found in a note to the annual
financial statements, and on the
Company’s website.
9. The work of the Board
of directors
The Board bears the ultimate
­responsibility for management of
the Group and for supervising the
CEO and the Group’s operations.
That makes the Board responsible for ensuring an acceptable
organisation of the business and
determining strategies, plans and
budgets. In addition, it makes the
Board responsible for establishing
control systems and ensuring
that the Group is operated in
compliance with the established
values base and ethical guidelines,
and with the expectations of the
owners for socially responsible
operation. The Board has a duty
to ensure that the accounts and
asset management are subject to
satisfactory controls. Matters of
significant strategic or financial
importance are dealt with by the
Board. The Board will protect the
interests of the shareholders while
also having a responsibility for the
Company’s other stakeholders.
The Board appoints the CEO, establishes the instructions, authority
and conditions of employment for
the CEO, and determines the CEO’s
remuneration.
Instructions for the Board
The Board has adopted instructions which specify the rules
and guidelines for its work and
administrative procedures.
These are reviewed annually or
as required. The instructions for
the Board define the duties and
Annual Report 2013 | Corporate Governance Report
Cargo operation MV Western
Texas in Norfolk
obligations associated with its
work, and its relationship with the
CEO. The chairman is responsible
for ensuring that the work of the
Board is conducted in a correct and
efficient manner. In order to ensure
a more independent consideration
of matters of material character in
which the chairman of the Board
is, or has been, personally involved,
the Board’s consideration of such
matters shall be chaired by some
other member of the Board. The
Board works on the basis of an
annual plan, with specified topics
and issues for Board meetings.
The Board evaluates its work and
competence on an annual basis.
This is done through a self-assessment which is summarised for the
Nomination Committee. The Board
shall carry out an annual review
of the Company’s most important
areas of exposure to risk and its
internal control measures.
Instructions for the CEO
The CEO of Western Bulk is responsible for the executive management of the Western Bulk Group.
The CEO shall be updated on laws,
provisions and procedures which
are relevant for the business and
the duties of the position; prepare
goals, policies, and strategies for
the business in co-operation with
the Board; implement and follow
up on resolutions by the Board;
establish an adequate organisation
and basis of competence to ensure
an effective implementation and
achievement of goals; establish and maintain contacts with
investors, alliance partners, and
relevant authorities; secure and
implement sound control and reporting routines for the activities of
the Company; and ensure that the
Company’s equity and liquidity are
sound. The CEO is appointed by the
Board and reports to it. The CEO is
duty-bound to keep the Board continuously informed on the Group’s
financial position, operations and
asset management.
Board committees
The Board may appoint working
committees to serve as advisory
bodies for the Board. The Board
has established instructions for a
statutory audit committee and a
remuneration committee, and has
appointed qualified members to
these committees.
The audit committee is elected
by and from among the members
of the Board. It must comprise at
least two members of the Board.
The majority of the committee
members shall be independent of
the Company, and at least one of
the independent members shall
have competence within accounting and auditing. The committee
shall provide assistance to the
Board in fulfilling its oversight
responsibility to the shareholders,
potential shareholders, and others
relating to the integrity of the
Company’s financial statements;
the financial reporting process; the
systems of internal accounting and
financial controls; the performance
of the Company’s independent
auditors; the independent auditor’s
qualifications and independence;
and the Company’s compliance
with ethic policies and legal and
regulatory requirements. Instructions have been drawn up to define
the audit committee’s work and
administrative procedures.
2.7
million
tonnes
Sugar
In 2013 Western Bulk carried
2.7 million tonnes of raw
sugar. This is almost 10%
of the estimated 30 million
tonnes global trade flow.
A remuneration committee,
comprising two or more members
of the Board independent from
the Company’s executive person-
55
Corporate Governance Report | Annual Report 2013
High quality
corporate
governance helps
to underpin
long-term
company
­performance.
nel, has also been established to
support the Board in determining
the compensation paid to the executive personnel. The committee
shall have the overall responsibility for evaluating the Company’s
remuneration plans, policies and
programs related to remuneration
of the Company’s board members,
senior management and employees advising the Board. Instructions have been drawn up for the
committee’s work and administrative procedures.
Details of the appointed Board
committees have been provided in
the annual report of 2013.
annually in accordance with the
Board’s annual plan.
Western Bulk has established
internal control procedures to
ensure quality in its financial
reporting, which is reported in
accordance with IFRS. The Board’s
audit committee forms the
governing body in this internal
control, and the Company has
established routines for monitoring
risks related to errors in financial
reporting, ensuring sufficient
capacity and competence in the
financial reporting functions,
having proper segregation of duties
in the financial reporting functions
and more.
10. Risk management and
internal control
11. Remuneration of the
Board of directors
It is the responsibility of the Board
to ensure that the Company has
sound internal control and systems
for risk management that are
appropriate in relation to the extent
and nature of the Company’s
activities. The internal control shall
encompass the corporate values
and guidelines for the Company’s
ethics and corporate social responsibility.
The general meeting determines
Board Members’ fees annually on
the basis of a recommendation
from the Nomination Committee.
The remuneration of the Board
shall reflect the Board’s responsibility, expertise, time commitment
and the complexity of the Company’s activities. Board Members’
fees are not linked to the Group’s
performance. No options are
awarded to members of the Board.
Members of the Board have no
agreement on a pension plan
or payment after their period of
service has ended. None of the
members of the Board work for the
Company in addition to their membership of the Board. Any remuneration in addition to normal Board
Members’ fees shall be specifically
identified in the annual report.
Risk management is an essential
part of Western Bulk’s business
model, focusing mainly on
managing market rate risk and
counterpart risk. The risk management infrastructure includes various
models to quantify risks, as well as
policies and procedures to limit and
control the various risks the Company
faces. At the core is a sophisticated
in-house risk management system,
largely inspired by the models seen
within the financial industry but
adapted to the realities of a highly
physical and imperfect freight
market. The risk management
infrastructure is continuously
updated to remain relevant to the
current risk environment.
The Board shall carry out an annual
review of the Company’s most
important areas of exposure to risk
and its internal control measures.
The CEO shall effectuate internal
control measures on the bases of
the instructions by the Board and
report the results to the Board
56
12. Remuneration of executive
personnel
As mentioned in section 9, a
remuneration committee comprising two members of the Board has
been established to support the
Board’s work on the conditions of
employment for the CEO and on the
strategy for and main principles of
remuneration for the Company’s
senior executives. The Group’s
guidelines for the remuneration of
executive personnel are described
in a note to the consolidated financial statements. The guidelines
shall help ensure convergence of
the financial interests of the exec-
utive personnel and the shareholders. These guidelines are presented
annually to the general meeting in
connection with its consideration
of the financial statements.
The Company’s bonus scheme
and the option program for the
executive management are not
in compliance with the Code’s
section 12 as these are not subject
to an absolute limit. Further, the
option program deviates from the
Code as there is no performance
criteria linked to the allocation
or execution of the options, and
therefore the program is not based
on quantifiable factors over which
the employee can offer influence.
In addition, as acquired shares are
not subject to a minimum period
of ownership, the program is not
linked to such long-term performance and value creation as is
recommended by the Code. The
Board is of the opinion that both
the option program and the bonus
scheme are in accordance with
similar arrangements for comparable companies, and with particular
regard to the option program, that
the program in reality is limited in
respect to how many shares that
can be acquired.
13. Information and
communications
The Board has established guidelines to ensure that all reporting of
financial and other information shall
be timely and correct, and based on
openness and equal treatment of
shareholders and participants in the
securities market within the framework set by the Securities Trading
Act, the Norwegian Accounting Act,
the stock exchange regulations and
best practice for listed companies.
Its primary purpose will be to clarify
the Company’s long-term goals and
potential, including its strategy, value
drivers and important risk factors.
Information from Western Bulk is
published in the form of annual and
interim reports, press releases, stock
exchange announcements and investor presentations. All information
regarded as significant for the valuation of the Company is distributed
and published by Thomson Reuters
and the Oslo Stock Exchange
Annual Report 2013 | Corporate Governance Report
messaging system. In accordance
with section 4.5 of the Continuing
Obligations, the Company will, no
later than by the close of the year,
publish the dates planned for the
publication of interim reports in
the following year. Any subsequent
changes to these dates will be
announced immediately.
Important dates for the general
meeting, publication of interim reports, public presentations, dividend
payment date etc. are published on
the Company’s website. The CEO
and the CFO of the Company are
the primary spokespersons to the
financial market on behalf of the
Company.
14. Take-overs
The Company’s articles of association place no restrictions on the
purchase of shares in the Company.
In the event of a take-over bid, the
Board and management will help to
ensure that the Company’s shareholders are treated equally and that
the Group’s day-to-day operations
are not disrupted unnecessarily.
The Board will seek to ensure that
the shareholders have sufficient
information and adequate time to
form an opinion on a take-over bid.
The instructions for the Board
of Western Bulk specify how the
Company will respond should an
offer be made for the Company’s
shares. The Board shall not hinder
or obstruct take-over bids for the
Company’s activities or shares.
Any agreement with the bidder
that acts to limit the Company’s
ability to arrange other bids for the
Company’s shares shall only be
entered into where it is self-evident
that such agreement is in the
common interest of the Company
and its shareholders. The same
shall apply to any agreement on
the payment of financial compensation to the bidder if the bid does
not proceed.
Any agreements entered into
between the Company and the
bidder that are material to the
market’s evaluation of the bid will
be publicly disclosed no later than
at the same time as the announce-
ment that the bid will be made is
published.
In the event of a take-over bid for
the Company’s shares, the Board
shall not exercise mandates or
pass any resolutions with the
intention of obstructing the takeover bid unless this is approved
by the general meeting following
announcement of the bid.
If an offer is made for the Company’s shares, the Board will issue
a statement which contains an
assessment of the offer and a
­recommendation to the share­
holders on whether they should
accept it. The statement shall
make it clear whether the views
expressed are unanimous, and if
this is not the case it shall explain
the basis on which specific members of the Board have excluded
themselves from the Board’s
statement. The Board shall
arrange for a valuation from an
independent expert, which shall
include an explanation, and shall
be made public no later than at
the time of the public disclosure
of the Board’s statement.
Any transaction that is in effect
a full disposal of the Company’s
activities shall be decided by a
general meeting.
15.Auditor
The Group’s auditor is elected by
the general meeting. The Board’s
audit committee will present its
recommendation to the general
meeting for the compensation of
the auditor, and when applicable
the appointment, termination and
replacement of the auditor.
year. The auditor meets the Board
at least once a year without the
executive management being
present. The auditor has the right
to attend Western Bulk’s general
meeting. Written confirmation
must be provided once a year by
the auditor to the Board that the
specified requirements for the
independence of the auditor have
been met.
550
ports
visited
In 2013 Western Bulk’s
vessels visited over 550
different ports, in 104
different countries.
That’s over 70% of the
world’s countries that
have a coastline.
Once a year, the auditor must
present the committee with the
main features of the plan for
conducting the audit work. The
auditor will review possible significant changes in Western Bulk’s
accounting principles, assessment of significant accounting
estimates and all significant
conditions where disagreement
has occurred between the auditor
and the executive management.
At least once a year, the auditor
must review Western Bulk’s internal control system with the audit
committee – including identifiable
weaknesses and proposals for
improvement.
The Board has established
guidelines in respect of the use of
the auditor by the Company’s executive management for services
other than the audit.
The Board will inform the general
meeting on the auditor’s fee, broken
down between audit work and other
services in addition to auditing.
MV Western Texas loading grain in Norfolk
Western Bulk’s auditor is RSM
Hasner, Kjelstrup, & Wiggen AS.
No qualifications have been made
in the auditor’s report for the last
three accounting years. The auditor gives the Board an account of
its work and provides an assessment of the Company’s financial
reporting and internal control in
connection with the a
­ nnual financial statements. At this meeting,
the Board is briefed on which
services in addition to auditing
have been provided during the
57
Corporate Social Responsibility | Annual Report 2013
Corporate Social Responsibility (“CSR”) Statement
As a company which operates a large fleet of vessels worldwide, Western
Bulk ASA (“WB”) recognise our responsibility to the environment. We also
have an obligation to our staff and the quality of their workplace, and to the
communities in which we operate.
We aim to integrate CSR efforts
into our daily operating and
business practices, because the
actions we take not only affect
the long-term sustainability of our
business, but also make us competitively stronger and enhance
the value of our business in the
future. We work both operative and
strategic with CSR-related matters
throughout our organisation and
through dialogue with our business
partners.
By integrating CSR information
in our annual report, we seek to
increase transparency about our
operations so that all stakeholders
have a clear sense of our non­
financial practices and the linkage
across our actions, policies and
performance.
Our CSR policy is based on statutory law requirements stated in
the Norwegian Accounting Act §
3-3c, and has been approved by
our Board of Directors. Our CSR
policy is described in our “Code of
Conduct for Business, Ethics and
Corporate Social Responsibility”
(available on www.westernbulk.
com), and include guidelines on
business principles, environmental
principles and human rights and
workplace practices.
Environmentally, we aim to reduce
waste by minimising what we
consume both at sea and ashore.
In the workplace, we seek to
create a culture whereby safety
prevails across all activities and
operating practices, and where our
employees can thrive and make
a difference. In the community,
we advocate and engage with
organisations that are involved in
or connected with the business of
shipping.
stated below. For the areas where
we do have control, like bunker
purchases, our policy is to comply
with all laws and regulations.
Environment
Policy
• Resource Efficiency - Our assets
and services are designed in such
a way that energy and raw materials are used efficiently, and
waste and residual products are
minimized over the life cycles.
• Precautionary Principle - We support the precautionary principle
by avoiding materials and methods posing environmental and
health risks as far as reasonably
practicable.
• Environmental Performance We shall routinely evaluate our
environmental performance, with
particular emphasis on evaluating
the potential risks of present and
future assets and operations.
Since WB mostly charters in
­vessels and only owns a small
part of our fleet, we do not have
direct control over the day-to-day
operation of the vessels that might
affect the environment. We do
however require that the vessel
owners follow current laws and
regulations. We follow up on our
partners through close dialogue
in relation to the policy elements
Operationalisation
WB only charters in vessels with
valid certificates of class, and has
internal requirements towards age
and vetting. WB encourages Rightship approval of vessels to ensure
quality of chartered tonnage. There
is also an economic incentive to
charter in newer tonnage due to
lower fuel consumption.
We separate the different elements
of our CSR policy into three main
areas: Environment, Business Ethics & Anti-Corruption, and People &
Society.
Ship Classification
(Source: www.DNV.com and http://www.iacs.org.uk/)
Ship classification is based on three main elements applicable to both newbuilding projects and in-service vessels:
1. Setting standards (classification rules).
2. Verifying compliance with standards (approval of specifications and drawings, surveys and testing).
3. Documenting compliance with standards (survey reports, classification certificates).
Ship classification is done by Classification Societies.
As an independent, self-regulating, externally audited, body, a Classification Society has no commercial interests
­related to ship design, ship building, ship ownership, ship operation, ship management, ship maintenance or repairs,
insurance, or chartering.
58
Annual Report 2013 | Corporate Social Responsibility
MARPOL (International Convention for the Prevention of Pollution from Ships)
• Includes regulations aimed at preventing and minimizing pollution from ships - both accidental pollution and that from routine operations.
(Source:www.imo.org/About/Conventions/ListOfConventions/Pages/Default.aspx)
MARPOL Annex VI
• Sets limits on sulphur oxide and nitrogen oxide emissions from ship exhausts and prohibits deliberate emissions of ozone depleting substances.
(Source: www.imo.org/OurWork/Environment/PollutionPrevention/AirPollution/Pages/The-Protocol-of-1997-(MARPOL-Annex-VI).aspx)
All our charter-party contracts
contain clauses requiring owners
to comply with international oil
pollution legislation and to comply
with low sulphur regulations in
MARPOL.
WB has signed a Letter of Intent to
support and participate in a three-year
research project run by Dr Roar
Aadland at the Norwegian School
of Economics (NHH). A collaboration between NHH and the Norwegian University of Science and
Techno­logy (NTNU) and Marintek
in Trondheim, the GREENSHIPRISK
project aims to develop a framework
for the modelling of uncertainty in
ship and fleet operations and, on
this basis, to develop applications
for the optimisation of operational
and investment decisions in order
to improve energy efficiency, safety
and profitability, and to reduce the
maritime industry’s environmental
footprint. Generally, WB advocates
supporting Norwegian research
communities that can contribute to
maintaining or improving Norway’s
front position in the maritime business.
tion and emissions than the
existing types of vessels.
Objectives
• In general newer tonnage has
lower fuel consumption than
older tonnage, and thereby less
emissions. The quality of the
vessel is also usually higher than
for older tonnage, reducing the risk
of incidents. Internal statistics
show that the average age on
chartered-in tonnage has gradually
reduced over the last years. Our
aim going forward is to reduce or
maintain average age on
chartered-in tonnage. See table 1.
• We are working on optimising
speed with respect to fuel
consumption. Average bunker
consumption per steaming day
(metric ton HFO) has reduced
from 27,8mt in 2009 to 23,2mt in
2013. Our aim going forward is
to at least maintain the current
consumption per steaming day.
• WB follows the regulations towards
usage of low vs high sulphur
bunkers in certain areas. See table
2 for our 2013 bunker purchases.
Table 1 - WB Chartering’s fleet age:
2010
2011
2012
2013
95
103
129
153
Average age
8.4
8.0
7.2
6.8
Weighted average age
8.8
8.6
7.0
6.3
Median
7.0
6.0
5.0
4.0
0-5 Years
37 %
43 %
51 %
57 %
5-10 Years
21 %
20 %
22 %
20 %
10-15 Years
29 %
19 %
14 %
16 %
15-20 Years
7%
12 %
9%
7%
20-25 Years
4%
2%
3%
1%
Over 25 Years
1%
4%
1%
0%
100 %
100 %
100 %
100 %
Fleet
Average number of ships
Fleet age
Fleet age by age category
Total
All of our long term Japan-lease
newbuildings are high quality
ECO-vessels, designed to have
significantly lower fuel consump-
Table 2:
Fuel purchased
Heavy Fuel, low sulphur (for main engine), tons
Heavy Fuel, normal sulphur (for main engine), tons
Diesel oil, low sulphur (for aux. engines), tons
Diesel oil, normal sulphur (for aux. engines), tons
Total, tons
2010
in %
of total
2011
in %
of total
2012
in %
of total
2013
in %
of total
10,703
3%
12,329
3%
34,235
6%
56,623
10 %
390,436
94 %
431,115
94 %
496,869
91 %
500,481
88 %
1,404
0%
1,859
0%
4,515
1%
5,058
1%
11,561
3%
13,553
3%
11,036
2%
8,967
2%
414,104
100 %
458,856
100 %
546,655
100 %
571,129
100 %
59
Corporate Social Responsibility | Annual Report 2013
Business Ethics and ­
Anti-Corruption
Western Bulk is committed to conduct business with integrity, openness and honesty in all aspects of
our business dealings. We demand
and expect that our employees
in every level of the organization
adhere to applicable laws and
regulations in the countries where
we operate.
Fairness and trustworthiness
is at the core of Western Bulk’s
corporate code of conduct. We
believe that earning and deserving
our business partners’ trust and
respect is one of the keys to the
continued success of the Company.
Western Bulk has a clear stance on
corruption. Internal policy instructs
staff to always comply with applicable anti-bribery laws, and each
officer, manager and employee of
WB is responsible for compliance
within his or her area of authority,
and must report any suspected violations to our Legal Department or
the Risk Management Department.
Policy
• Legal Compliance - In every
country in which it operates, the
Company shall abide by the laws,
governmental rules and regulations of that country. It is the
personal responsibility of each
employee and officer to adhere
to the standards and restrictions
imposed by those laws, rules and
regulations. In situations where
the law does not give guidance,
the Company applies its own
standards based on its corporate
values and culture. In cases of
conflict between mandatory law
and the principles contained in
this Code of conduct, the law
shall prevail.
• Relations with Business P
­ artners­
- The Company’s dealings
with its business partners are
characterized by fairness. When
acting on behalf of the C
­ ompany,
directors and employees shall
not take unfair advantage
through manipulation, concealment, abuse of privileged
information, misrepresentation
of material facts, or other unfair
dealing practices. The Compa-
60
ny shall not offer customers,
potential customers, governments, agencies of governments,
or any representatives of such
entities, any rewards or benefits
in violation of either applicable
laws or reasonable and generally
accepted business practices.
Company employees must not
accept payments, gifts, or other
kinds of reimbursement from a
third party that could affect or
appear to affect their objectivity
in their business decisions.
• The Company shall prevent
­money laundering - The Company
will take the necessary steps
in order to prevent its financial
transactions from being used by
others to launder money.
Operationalisation
WB joined the Maritime Anti-Corruption Network (MACN) in 2013.
Established in 2011, MACN is a
global business network working
towards its vision of a maritime
industry free of corruption, where
the members learn and share best
practices to improve their anticorruption programs. MACN also
collaborates with key stakeholders,
including governments, authorities,
and international organisations, in
markets where corruption is prevalent to its membership, to identify
and mitigate the root causes of
corruption in the maritime industry.
In addition to the Corporate Code
of Conduct, explicit guidelines for
ethics and behavior are set out in
the Company’s Policy of Prohibition
against Bribery of Government
Officials, Travel Policy and Entertainment Policy, of which printed
copies are distributed to the Company’s Business Unit Managers
and other commercial staff in all
offices. The content and underlying
message of these policies are also
emphasized during training sessions for the Company’s commercial staff, chiefly conducted during
the annual internal “Chartering
Conference”.
WB has strict policies to comply
with US, EU and UN sanctions
and trade embargoes. Prior to
entering into business with any
new vessel owner or charterer, they
are screened against sanctions
databases. In some instances
where deemed necessary, majority
shareholders and directors or other
principals are also screened.
Objectives
• Systematize and further improve
internal training and education
within the area of compliance.
This will include educating all
employees, in both commercial
and operational roles as well
as support functions, on how
to better identify and report
so-called red-flags in business
transactions at all levels.
• Introduce formal and systematic
due diligence of new agents
and brokers before employing
their services, in order to ensure
that our main third-party service
providers are vetted as thoroughly as our customers and
vessel owners.. Our intention
is that this will also strengthen
our internal systems to prevent
money-laundering.
• Establish a good, operative
“Whistleblower”-policy. Today,
reports on violations of our
code of conduct may be done
anonymously to the chairman of
the audit committee, but our aim
is to further lower the threshold
for employees to report any
concerns, by guaranteeing their
anonymity also when approaching other officers or managers in
confidence.
People
Our employees mostly work ashore,
and we generally have little direct
influence for seafarers, but we still
focus on assuring safe conditions
for seafarers through the requirements we make in our charter-party
contracts. WB is in continuous
dialogue with our counterparties
to ensure our policy is understood
and the policy elements fulfilled.
Human rights, Workplace
practices
Policy
• Human Rights - Within its sphere
of influence, the Company shall
support, respect and commit
to the principles set out in the
Annual Report 2013 | Corporate Social Responsibility
international recognised social
and ethical standards for protection of human rights and ensure
that it is not complicit in human
rights abuses.
• Non-Discrimination - The Company’s policy prohibits unlawful
discrimination against employees, shareholders, directors,
customers and suppliers on
account of gender, race, religion,
age, disability, sexual orientation,
nationality, political opinion,
union affiliation, social or ethnic
origin. Workplace diversity at all
levels is encouraged. All persons
shall be treated with dignity and
respect and they shall not be
unreasonably interfered with in
the conduct of their duties and
responsibilities. All employees
and officers shall assist to create
a work environment free from
any discrimination due to gender,
race, religion, age, disability,
sexual orientation, nationality,
political opinion, union affiliation,
social or ethnic origin.
• Labour - No form of forced,
compulsory or child labor is tolerated within the Company. The
minimum employment age is the
age of completion of compulsory
school. Freedom of association
and the right to collective bargaining and agreements shall be
respected in all operations of the
Company.
• Work Environment - The necessary conditions for a safe and
healthy work environment shall
be provided for all employees of
the Company.
Operationalisation
WB policy is to comply with all
current laws and rules on this area.
We honor or exceed all applicable
laws on the subject of worker’s
rights in the countries where we
have on-shore operations. We
also honor the right of seafarers
beyond minimum standards. In
2013, all partly owned vessels were
awarded with the Maritime Labour
Convention voluntary Declaration
of Compliances. The Maritime
Labor Convention (MLC), 2006
provides comprehensive rights and
protection at work for the world’s
more than 1.2 million seafarers.
The Convention aims to achieve
both decent work for seafarers and
secure economic interests in fair
competition for quality shipowners.
The board of director’s report in the
annual report includes information
about sick leave statistics in the
Norwegian company, and on the
principle and ambition of non-­
discrimination of any kind in the
workplace.
Also, our charterparties require that
the owners of the vessels guarantee that a valid ITF (International
Transportworkers Federation)
agreement for the vessel is available on board, and that the officers
crews wages and conditions on
board are in compliance with the
agreement. WB charterparties also
require that owners follow SOLAS.
The Group continuously strives to
have appropriate rules and procedures in place in the day-to-day
work, as well as identifying new
areas where we need to adapt. In
2014, we will initiate processes
aiming to identify and further define
relevant objectives for our CSR
initiatives within the three areas
“Environment”, “Business Ethics
and Anti-Corruption” and “People
and Society”. As described above,
we will also work on implementing
new policies, routines and procedures, as well as strengthening
our internal training and education
within the relevant areas.
With regards to piracy issues and
safety at sea in general, we only
send a vessel through potentially
high-risk areas if necessary and
recommended precautions have
been made, in dialogue with the
vessel’s owner.
Objectives
• Establish a good HSE “whistle­
blower” channel of communication for employees to report
on any HSE issues within the
Company.
• Renew MLC certificates for
owned or partly-owned vessels
every year.
***
Safety of Life at Sea (SOLAS)
(Source: www.IMO.org)
The Titanic disaster prompted the world’s maritime nations to gather in London in 1914 and adopt what would become the
International Convention for the Safety of Life at Sea (SOLAS).
The Convention established the first set of international vessel requirements for lifesaving equipment and other basic
safety measures.
It is still in force today, and signatory states must comply with minimum safety standards in construction, equipment and
operation.
61
Auditor’s Report | Annual Report 2013
Auditor’s Report
62
Annual Report 2013 | Auditor’s Report
63
Addresses | Annual Report 2013
Addresses
Western Bulk ASA
Henrik Ibsensgt. 100,
P.O. Box 2868 Solli
N-0230 Oslo
NORWAY
Phone: (47) 23 13 34 00
Fax:
(47) 23 13 34 91
Western Bulk Pte Ltd
16 Collyer Quay #28-01
SINGAPORE 049318
Phone: (65) 6 622 0300
Fax:
(65) 6 622 0301
Western Bulk Carriers (Seattle) Inc
1001 Fourth Avenue,
Suite 2323
Seattle, WA 98154
USA
Phone: (1) 206 292 0909
Fax: (1) 206 292 0904
Western Bulk Chile Ltda
Edificio Mistral, Rosario Norte #615
Of. 1903, Piso 19
Las Condes, Santiago
CHILE
Phone: (56) 2 2714 7300
Fax:
(56) 2 2714 7325
64
65
www.signatur.no • 130667
Western Bulk ASA
Henrik Ibsensgt. 100
P.O. Box 2868 Solli
N-0230 Oslo
Norway
Office teleph.: (+47) 23 13 34 00
Telefax: (+47) 23 13 34 91
www.westernbulk.com